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


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


It seems the entire milk processing industry has conspired to make me look a gibbering fool (not at all hard to do), by posting unchanged prices this week. The Dutch sweet whey market is allegedly €20 lower, but no sellers I’m aware of have discounted prices yet.


The significant fact is that whereas even producers were completely sold out last week, suddenly they’ve found spot production and are offering material again. This will no doubt upset the Arthur Daleys in the middle market, as they’ve only been able to secure minimal tonnages to sit on while running the market as high as they can, but it should indicate this bull run is running out of steam.


Sterling is basking in the headline news that the UK economy is expected to bounce back strongly in Q2 because of the vaccine rollout, but the solid basis for today’s strength is the BoE left interest rates unchanged, against rumours of a move to negative interest.


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 market is raging. Whey is up €60 and skim a full €100, 7% and 5% respectively. Rather than write reams, I’ll list reasons by bullet point:

  • Cheese producers for catering have severely scaled back production because of restaurant closure. Whey from mozzarella production is most seriously affected.

  • Chinese imports continue at high level

  • Liquid milk collections are down by 1.5-2% - cold weather, high feed costs, poor returns

  • End users put off Q1 purchases, and have returned for spot supplies, exacerbating the rise

  • Demand for animal feed use remains strong, despite dire market prices for pork across Europe

  • Middle market traders are ratcheting the spot market higher, outbidding consumers and sitting on long books

  • A major supplier of an alternative product (acid whey) is having difficulty sourcing liquid serum

My prediction of mid March before the market will break requires revision, probably into April or beyond, as long as restaurants stay shut and extant animals need feeding.


At least the pound is exploring giddy heights not seen for a six-month or longer, buoyed by the lower than expected rise in the UK jobless figure.


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