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


The milk powder market is largely unchanged, but more significantly, unsupported.


The main reason for this is an about-turn in purchasing from SE Asia, perhaps the classic Chinese Breakdown, as the buying demand seen over the past quarter has vaporised, and red-faced traders are finally offering spot supplies of sweet whey. So, the market is unchanged, may even rise €10 or €20 over the coming weeks, but the underpinning seems to be disappearing, so we should see a falling market going into Q2.


It’s not the same story with skim milk, though, as that market is still fundamentally undersupplied, and has increased by €10 over the last week. It should ease with spring calvings boosting milk supply, and hopefully be helped down by falling whey prices, but that could be further into Q2.


Sterling has regained 30 month highs, topping €1.16 and $1.41, as the UK’s economic recovery from Covid is promised to be faster than other major economies.


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

Updated: Feb 19


But no signs or easing, as supply is still poor on sweet whey and skim milk powder. The market is likely to remain rangebound in a narrow band for the next month, as supply remains tight but domestic demand remaining muted.


Sterling has increased again over the week, much to the chagrin of UK exporters, who have seen frictionless trade turn into tradeless friction.


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


Dutch markets for sweet whey are posted €10 lower, but France is unchanged, and all the talk is about Chinese demand. One vignette was a Chinese premix company attending the virtual Eurotier, ostensibly selling premix, but was actually a front for buying sweet whey. Whilst the European pork market is on its back, and farmers have to feed, Chinese buyers are paying €50 over the market just to secure whey supply, so the market is still in the vortex, despite showing unchanged values week-on-week. Both lactose and whey permeate are impossible to find, so there is no pressure from by-products.


French milk production fell by 2.2% last year, although organic milk did increase by nearly 5%. Poor forage quality, low milk price, cold weather and raging feed prices remain the cornerstones of the reduction in liquid milk supply, and that is feeding through into a lack of skim milk powder.


The only good news is that Sterling currently appears to be the least un-favoured currency, basking at levels not seen since Brexit was still too far ahead to worry about. The 68% fall in UK exports to the EU during January doesn’t seem to be bothering currency dealers’ pretty little heads.


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