I have faithfully reported that the international milk powder markets have been latched to soft commodities, principally the vegetable oil markets, but now both sweet whey and skim milk are still heading skywards whilst everything except palm and coconut oil has dropped through November. The reason remains simple; feed price shoots up, milk price doesn’t, farmers worldwide rein back production, less liquid milk = higher price for milk derivatives.

Statistics still point to a suspiciously small reduction in EU milk production of 1-2%, and early season indications from New Zealand show 3% down. Skim milk has leapt another €40 week over week, and sweet whey by €20. Skim has remained more plentiful in physical supply, but has now swapped places with sweet whey, with physical prices for real deliveries having risen in one case by €110 per tonne in a single week.

Looking globally, there are signs that the resurgent Asian market is coming back to the EU for sweet whey, as the previously burdensome stocks in the US have depleted, and that market sits only 8-10% lower than the EU.

So, the traditional Q1 decline doesn’t look like an early starter next year……

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