The numbers are out of date, but the balance illustrated above still holds true. And while liquid milk prices fall across Europe, skim milk is counter-trading, up another €30 this week, now €130 higher over the last month, or 6%. On the face of the headline price, one would expect CMRs to be increasing, but in the macroeconomics of global skim milk, the largest dairies mostly have milk replacer business to downstream their downgrades in house, and so discounted material is still freely offered at unchanged levels. The momentum behind the headline price rise in skim is probably the recently announced 60,000 tonne sale to Algeria, but taking that big a chunk out of the market still hasn’t frightened the horses.

It’s interesting to see that prices exactly mirrored February 2022, when the world changed, and didn’t go bananas until the autumn, unlike the veg oil markets, particularly sunflower oil. Actually, that is an interesting one, as the price of sunflower oil has crashed from the Ukraine crisis level of $2400 to little over $1000, whilst soya and palm oil have shown far more modest declines. Soya is still well overdone, with a mega Brazilian crop about to weigh on the market, and the global economic slowdown being ignored, and palm oil is still buoyant, with danger-level rains reported in Malaysia.

Sweet whey had another flat week in a flat month, at lower than cost of production, but more available than sluggish demand is calling for, so a market drifting, rather than being in balance.

The consensus is that the CMR and milk powder raw material market will continue broadly unchanged in the next weeks, but no one expects an imminent decrease. Whilst dairy farmers have seen 20% plus come out of peak milk price, input prices remain at market highs, so I see falling milk production beyond the flush of spring milk in Europe, and processors looking to recover more from skim and whey.

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