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

However predictable a further price rise in skim milk powder was, a €70 or 2.5% hike in a week is pretty staggering. And that isn’t the whole story, as physical supply has dried up and the market price if one can find it is over €100 higher than the published price of €2760. Processors are making cheese like there’s no tomorrow and snaffling most of the milk in an undersupplied market, not that much of the price rise seems to be making it back to the farmer yet.


And that leads into sweet whey, which should frankly be burdensome and continue falling, but those clever middle market chaps have hiked prices €30 since last week, a 3% rise, and there’s masses about. Another thing that’s impossible to justify is whey protein concentrate jumping €200 in a week, and that comes from cheese production.


The backdrop of vegetable proteins and oils is quiet, with soybeans dipping below $12 (recent high of $15), meal about 25% off the highs and soya oil pretty stable, so no influence there. Skim is nigh on impossible to find, possibly because processors are hiding it, so will probably be ratcheted over €3000 and possibly then some, but with ample sweet whey supplies and no export interest reported from SE Asia (which has been sated by US supply recently), it’s odds on to fall back in Q4.


The pound seems to like Boris going on holiday while nasty reports are landing left, right and centre, the only thing that is taking a little of the edge off these horrible price rises.


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 skim milk price is heading into space faster than Captain Kirk, up nearly 2% this week, or €50 per tonne, and it's now impossible to find under €2800, and then only a truck at a time. It's getting to the stage of if you ask how much, you can't afford it. It is as fundamental as lower liquid milk supply than non-liquid milk processors require, on the back of zero stocks. Where it'll peak is anyone's guess, but the last high of €3K during Peak Oil in 2008 was underpinned by intervention stocks, which are no longer there.


Whey is a tad more under control, and although it isn't critically short, the amount that has been diverted into more lucrative whey protein concentrate (€2400) has increased the discount for the byproduct whey permeate, leaving whey broadly in supply/demand balance. Having said that, with WPC prices increasing, it may be dragged up in the skim vortex.


The pound has responded remarkably well to the socialist manifesto that the Tory leader presented to their conference, bashing bosses into paying higher wages. Magic money tree time again.......


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 two pillars of the milk powder market seem to be moving apart. Sweet whey is showing a €10 decrease on the Dutch market, but still unchanged in France. The interesting factor is what is happening to whey permeate, as the price is down to €700, an unusual discount of €280, which is generally a €200 gap, so this may yet pressure sweet whey downwards.


Same old, same old for skim milk, though, I’m afraid, up the best part of 1% this week (+€20), and still like hen’s teeth. I can’t see the market breaking anytime soon, given the chronic undersupply of liquid milk when the market is traditionally awash. So stay buckled in for the ride until further notice.


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