The answer to H G Wells’s conundrum is probably both.

The milk powder markets have outdone even their own recent performance with a spectacular leap higher this week; sweet whey up 4% (+€50) and skim milk up 2% (+€70).

OK, so palm oil might be up a tad on the week, but the soya complex is marking time unchanged, waiting for some late season rain in South America to cheer up the soya harvest, but there’s no discernible reason that supports the astronomical rise in milk powders.

The same situation remains, in that while sweet whey is hard to find, skim milk is freely available when the ransom price is paid. Teasing that apart, it is reasonable to suppose that the milk driers are charging what they like, which is not sustainable, lack of sweet whey supply does imply shortage of liquid milk. This price model could see skim milk level off before dropping, and the price gap between the two narrowing.

A cursory glance just now at the post PM's Question Time £:€ exchange rate shows €1. 1984, so another nod to H G Wells.

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