Greg's Milk Monitor 30 January 2025: Something funny going on

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

Greg's Milk Monitor 23 January 2025: Market underreporting

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

Greg's Milk Monitor 16 January 2025: Where's the fundamentals?

Sweet whey continues its march upwards, albeit slowly with a €10 hike to €910 on the Dutch market, the small rise somewhat diminishing the genuine difficulty securing physical supply, which is invariably offered over the market. Skim milk, on the other hand, remained unchanged, belying the ease of purchase, 

Continuing to examine the disparity between the US and European whey markets from last week, we haven’t got much to moan about, but it does support higher European values, at least. 

Looking at skim though, it seems we are getting off lightly this side of the pond, as values are raging in the US

The fundamentals I refer to in the headline are actually those of the wider market, as we see the soy complex going in different directions. The red brace brigade have come back to work with a vengeance, pumping soybeans up 10% on pretty much nothing crop-related, but meal and oil have parted company, meal down about 4% since the turn of the year, but soy oil up a stonking 12%. 

What has crept up on me, apart from rising prices at the pumps, is the crude oil market, up above $80 a barrel after the heady days in December when it breached the $70 mark. This flows over into biodiesel demand, probably the largest factor in the soy oil hike. But what makes a nonsense of that is that palm oil is down nigh on 20% since early December, where the biodiesel mandate of 50% palm oil (!) kicked in on January 1st. Main reason for that is that exports to India dropped 41% last month, indicating that palm oil had become relatively expensive against soft oils.

But back to the milk powder markets, significantly cheaper palm oil has had zero effect on derivatives like fat-filled whey, where supply is still crippled due to fairly epic demand for calf milk replacers. Same for whey protein concentrate, where the small number of processors are overwhelmed with demand.

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