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20 July 2023: "History is bunk ...

The famous and often misinterpreted statement by Henry Ford may chime with my resistance to the pseudo-science of predicting the future by examining the past, but this graph says something to the most disbelieving of sceptics.

The wizard’s hat caused by the Ukraine war is no surprise, but the decline close to levels last seen in the financial crisis of 2008/9 and the 2016 slump is inexplicable, given the spiralling cost base of production and raging protein prices, and now grain, from the Black Sea shipping deal collapse. History tells us we could see prices go down significantly further, but given what’s going on in the world beyond milk powders, I have to agree with Henry on this one.

To detail, sweet whey shed another €20 this week, another 3.5% lower, making the cumulative loss a staggering 15% since the beginning of the month. Having said that, the French market remains unchanged, now €110 higher than the headline Dutch market shown above (which is odd, given the haulage differential between Rotterdam and Brittany is far lower than that). Skim milk powder has remained stable at €2110 this week, and spot material is still freely offered. Other fats remain relatively cheap, with the exception of fat-filled product, which is controlled by far fewer producers than the macro feed materials.

What is curious is the price relationship between whey and skim, on the basis of protein content, the argument being that to rebalance the equation on that parameter alone, whey should rise and skim should fall, but as both markets are still suffering the hangover of the wilful withholding of product to fuel last year’s bull run, there is no cross-referencing to predict the next market move.

Elsewhere, palm oil has jumped up to levels last seen in early March (MYR4000), now up 800 ringitts since the low at the end of May. Soyabeans rose marginally over the week, but meal put on $25, leaving soy oil gently firmer. Crude oil is holding up in the mid $70s, so biofuel mandates are still supporting soya and palm oil.

The tin lid on prices is the slump in sterling the moment a downtick in inflation prompted the chatterati to speculate that UK interest rates will fall soon.

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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