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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


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