I make no apology for using the CLAL graphic again, showing just how stark the rise in skim milk price has been, the counterpoint being the opposite effects of Russian incursions into Ukraine in 2014 and 2022. Last time the sanctions imposed on Russia sharply reduced the export of skim milk, but there was still quarter of a million tonnes in EU intervention stock at the time, the luxury of which we no longer enjoy. Large scale purchases by the edible sector has pulled up feed grade skim, the former up €140 on the week, feed grade by €100. Sweet whey is nominally up only €30, but traders are pushing for and getting significantly more.

The backdrop doesn’t support the milk powder rush, as the soy complex has seen as many red days as green over the last week, and palm oil has fallen back to invasion day levels. Province-wide covid lockdowns in China have helped crude oil prices significantly lower, but the markets have corrected by bouncing 5% today. So the fact that milk powders are starkly higher whilst few of the other staples support the argument suggests that when the market breaks, as all markets do, the collapse is likely to match the 2014 slide, and some.

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