11 November 2021: Square Book

The truce is over, for whey at least, as it is up €10-20 this week, but more significantly producers warn of more to come as their milk supply dwindles. Skim milk shoots up another 2% or €60 on the same continued precept of insufficient milk supply.

Let's look at the milk situation. I have previously posted figures suggesting a reduction of liquid milk of as much as 3%, which is pretty staggering in peak autumn milk, but I have seen figures this week suggesting anything between 6 and 10% reduction, which is almost wartime rationing level. If figures anywhere near this are the actual reduction, we are looking at a year of stock recovery time. Another scary fact is that buyers worldwide have bought into the rise like there's no tomorrow, extending product time to six weeks, so for the time being farmers do what they do, accept farming is a cyclical game and paying up.

But my reading is that this isn't cyclical; food, fuel and worldwide logistics have risen to unimagined levels, and whilst nothing's settled down yet, we ain't going back to the old world order of cheap food, $30 Brent Crude and oversupply in world shipping. Whilst farming adapts to remaining profitable in the new world order, all we people in the supply chain can do is keep as square a book as possible and supply the reducing interim 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


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