top of page
Greg's Milk Monitor.png

 

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 ..." Greg Dunn

​

Search
    • Jan 30, 2019
    • 1 min read

30 January 2019


The biggest news this week is that the market didn't go up. Indeed, sweet whey even dipped in the Netherlands.


In a market news vacuum, one can only hypothesise, and last week's comment about throwing in the towel may have been timed about right, as those who were tempted to buy bought, and those who didn't believe in the hike didn't. Result: fewer buyers in the market, and more sellers tempted out = peak milk powder. At least, I hope my reading is right, and we won't see it gallop high again in the coming weeks.


What suggests it won't crash and burn is the high prices paid by the middle market for the intervention skim milk, so decline is more likely to be gentle than precipitous.


And we managed to hang on to stronger sterling despite the push-me-pull-you votes in the Commons yesterday.

 

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

    • Jan 25, 2019
    • 2 min read

25 January 2019


I’ll start with the good news; sterling strength. Goodness knows why, though, with Airbus saying what we’re all thinking, and more amendments being put before Parliament than hot dinners before the next vote, but presumably the clever money senses the mad dogs of No Deal aren’t barking quite as loudly. However, six cents up from the bottom does take some of the sting out of the next paragraph.


As the old song goes, the only way is up. Another €30 on sweet whey, and skim milk. Whilst the continued whey hike is perhaps understandable (now up a full €100 since mid November), the upward march in skim milk powder prices remains as inexplicable as when it started. To lift verbatim from Lacto’s weekly update - "Explanation is still shortage on SMP, 3 month ago after the low production summer we have too much and now during the production peak, there is not enough."

I’m as guilty as anyone of having personal investment in a market view, and feeling it’s ’not fair’ when the market moves the other way. Then, when the unexpected happens, one does nothing, sure in one’s conviction it will correct. The third stage is roundabout now, throwing in the towel, accepting the new normal, and second guessing where it goes from here. Looking at the charts, the whey market has risen through Q1 and Q2 for the last two years, so we could well be in for more of the same (especially considering whoever has cornered the skim market with heavy intervention purchases isn’t going to sell at a loss in a hurry), towel-throwing doesn’t look like it would lose money for the rest of Q1 and probably April and May.


Having said that, as the biggest fundamental of them all, supply, is no worse than in balance with the second fundamental, demand, profit-taking could kick in from the skim milk producers, leaving the middle market long and wrong with their intervention book.

Countering that is the fact that producers are enjoying much better returns, so why spoil a good thing?

 

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

    • Jan 17, 2019
    • 1 min read

17 January 2019


There is some good news, but not much. Namely, since our politicians have rediscovered their liking for a good party whipping, they’ve inadvertently put a bit of backbone back into sterling, and now even the blowhards seem to accept at least some postponement in leaving the EU. Still, a cent’s a cent and that has taken some of the sting out of a hike in sweet whey prices.


The old seesaw between whey and skim is back in action. Putting aside quite where 80,000 tonnes of SMP disappeared out of intervention to, the €300 hike in SMP values has focussed the minds of anyone with a drying tower, and thus whey has become less attractive to dry, so whey is ratcheted upwards, now up €60 in six weeks, half of that in the last week.


Now whey is technically becoming a bit shorter in supply, possession of booking dates is more important than predicting when the market will break, so a rolling month/six weeks cover seems the safe option.

 

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

bottom of page