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Welcome to the BDC agri blog. Here you will find reports from some of the events we attend, as well as Greg's popular weekly view of the UK milk and whey powders market:

 

"Many years ago, I got my first job in the dairy industry, as class milk monitor at Tollesbury Primary School.
I thought it was a job for life, but sadly Margaret Thatcher famously ‘snatched’ free school milk,
and the nation’s health has suffered since. Fifty-four years later, I am still musing on the dairy industry,
with an irreverent view of politics and currency ..." G
reg Dunn



This is the second time I have referenced the gentlemen above in these columns, the last time being when the milk powder market was 'deeper and down’, but this week we see a repeat of unchanged published prices for both whey and skim, yet the real world of provisioning factories is paying yet more to secure physical supplies. The latest theory emerging is that traders spent the late autumn stockpiling long books, which are now being dribbled out at inflated prices, but it would be in the traders' interest to inflate traded prices, not wilfully post them as unchanged. 

 

WPC and Fat-Filled Whey are both still rare as hens’ teeth, exacerbated by the foot and mouth outbreak in Germany, which is in turn plunging German sweet whey prices, as exports of animal products are still banned in the wider EU and UK, which the below graph demonstrates.


 

Background markets remain broadly unchanged, the soy complex has been up, down and sideways on rains arriving too late for Argentina, and too much in Mato Grosso, balanced against continued reduced demand from China, trading tariff blows with the US. Palm oil is inexplicably stronger, citing better prospects for biodiesel demand in a world that seems to be going in the other direction.


BDC agri is the UK broker for Lacto Production milk and whey powder products.


For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com



The needle seems to be stuck on the record (a euphemism from the days of gramophones, for younger readers) for both whey and skim, as the Dutch market is posted unchanged yet again, yet the real world is paying €30-40 more to secure spot supplies. Skim is little better, so why these headline prices are continually posted unchanged is verging on conspiracy. 

 

There’s no good news on anything else, either, as WPC and fat filled whey are both unobtainable. The only exception is hydrolysed gluten, which is an odd ‘un, as the major producer was closed due to fire last year, creating a shortage, but it is now freely offered, but the factory remains closed?!

 

Sales interest is still strong, production is now out to 5 weeks from order and getting longer, with securing raw materials an increasing headache for milk powder blenders.

 

Other markets are quieter, Trump’s plea to next week’s OPEC meeting to cheapen oil has pulled crude prices close to $70 again, and the improving harvest weather in Brazil is balancing the dry conditions in Argentina to leave the soy complex broadly unchanged, with palm oil following suit.


BDC agri is the UK broker for Lacto Production milk and whey powder products.


For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com



Frankly, things are in a muddle in milk powders. Whey price is underreported and difficult to find, skim is unchanged and showing signs of turning north, WPC is unavailable, as is fat-filled whey, and even refined palm oil has turned north again, while coconut oil continues into the stratosphere.


Whey is quoted unchanged on the Dutch market, but this is at least €20 lower than the cheapest available supply, and then some. Skim has remained unchanged since Christmas Day, but what were ample supplies are tightening quickly. The foot and mouth outbreak in Germany has brought the shutters down on milk powder exports, which has compounded an already serious supply line hiatus on processed milk powders.


Current production time is 20 working days, as brisk demand for milk replacers continues to apply upward pressure on everything. The huge gulf between US and Dutch whey prices certainly suggests there is no respite for European prices anytime soon.




Not that background markets have any connection with the current milk powder muddle, but the soy complex has spiked in a minor way on Argentinian crop fears. However, soy oil has ticked down whilst meal added $15, and crude palm oil fell back as it is uncompetitive against soy and sunflower oil, and even the biodiesel mandate hasn’t supported it, after a certain populist politician said ‘Drill, baby, drill’ and pulled 5% out of crude oil prices.


BDC agri is the UK broker for Lacto Production milk and whey powder products.


For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

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