Where to start, supply, Brexit or rain? Physical supply problems after new year are plaguing spot whey deliveries, which are expected to resolve, but certainly have pushed prices even higher. Whey is up €30 on last week, now €130 higher in ten weeks, and no sign of it slowing down. Much of the reason is domestic demand, and heavy Chinese buying (I read recently of a five storey 84,000 sow hotel complex coming online imminently in China) but ever since soya became the darling of the pension funds, pretty much everything edible has headed north. Repeating last week’s mantra, it looks like March is the earliest we’ll see a significant break in prices, following previous years’ trends, overlaid by hopefully South American new crop soya bending the charts south.

Skim milk powder is also caught up in the vortex, up €30 week-on-week, but at least physical supply is available, so the trajectory should break before whey does, on the basis that the Chinese aren’t buying skim.

A quick word on transport and Brexit. It seems, fingers crossed, that there haven’t been any delays at customs for the first deliveries post January 1st, but this may change after April 1st, when post-delivery clearance is discontinued. The extra costs have put about 10% on transport charges, so some of this week’s price hikes are down to that factor, however well Brexit has served the political careers of its generals.

The pound has finally enjoyed some of the expected benefits of the EU divorce deal that were muted by profit-taking in the immediate aftermath of the Christmas Eve agreement. At least a stronger pound is taking the edge off the hike in milk powders.

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