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19 March 2020: Meltdown

This is the hardest commentary to write, as the only fixed point in the market is exchange rate, which in the case of sterling is a horror story.

In short, there is no market, as in barely no physical trades reported and quoted prices are basically opinions of where the market might be.

Skim is quoted as much as €200 down on the week, and whey by up to €50, and on the face of it, that should translate into enormously lower prices, if your purchase currency isn't GBP.

The reality is skyrocketing logistic costs, as borders are closed and workforce pressures make physical delivery very difficult. This affects Lacto Production acutely, as they are a blender/processor/packer, so their inbound raw materials are affected as much as deliveries out. It is therefore no surprise to see the commodity markets in free fall when physical possession is the real problem.

Watching sterling fall three clear cents in ten minutes yesterday afternoon is a sight I will remember for a long time, if I'm spared. This is not a time for levitous political comment, but the best analysis of sterling's weakness I have found is summed up in this soundbite: 'In short, sterling is particularly sensitive to global investor meltdowns.'

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


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