20 January 2021: Sacré bleu!

Two days after Blue Monday and not much sign of cheer, so let’s start with the one scrap of good news; sterling strength. The pound has climbed to multi month highs, possibly on stronger inflation than predicted, if the old rules of interest rates being used to manipulate inflation still apply. Sterling has been fundamentally underpriced throughout the second half of last year, so should continue to strengthen as inflation increases through the first quarter.

The bad news is that whey is up close to 5% week-on-week, and skimmed milk powder by 2.5%. As dairy farmers have faced 20-30% hikes in feed costs and not a pfennig extra for their milk, production has been reined back, exacerbating a spot supply situation, and with the middle market and producers hoarding spot material like lockdown lavatory paper, the €50 hike in both whey and SMP powders reflects the few physical trades that have taken place. Spot whey is literally unavailable, so blenders are in an invidious position of scouring further afield to obtain physical stock.

This situation is likely to remain in place deep into February and could easily extend into Q2, so possession of stock seems wiser than second-guessing a price collapse

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


Recent Posts

See All

14 October 2021: Market's on fire!

However predictable a further price rise in skim milk powder was, a €70 or 2.5% hike in a week is pretty staggering. And that isn’t the whole story, as physical supply has dried up and the market pric

7 October 2021: Heat turned up even higher

The skim milk price is heading into space faster than Captain Kirk, up nearly 2% this week, or €50 per tonne, and it's now impossible to find under €2800, and then only a truck at a time. It's getting

30 September 2021: Market divergence?

The two pillars of the milk powder market seem to be moving apart. Sweet whey is showing a €10 decrease on the Dutch market, but still unchanged in France. The interesting factor is what is happening