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21 December 2023: What is going on?




Not exactly a nightmare for procurement of milk powders, but a headache disguised as a conundrum.

 

There’s some crazy expensive stuff going on in the real world of sourcing physical supplies of several components of milk blends, whilst the market prices being advertised are unchanged to lower. Sweet whey is posted down 1% to €810, whilst skim milk is unchanged at €2530 for feed, still an unprecedented €10 lower than edible grade.

 

But here’s what is really going on. Starting with Dutch skim, the October stats have just been released, and the stark reduction in processing has continued, down to 3,700 tonnes per month, now half three year average, so this definitely supports prices going forward 

 



 

Sweet whey supply is being severely limited, starkly different from even two weeks ago. This may be traders shutting up their market barrows early before the holidays, and it’s producers at it too, but it certainly doesn’t presage the usual new year slide. 

 

Whey permeate has disappeared from the market, when it was being thrown at it a month ago

 

Fat-filled whey is now €200 above usual trends, with the five producers comfortable in their price solidarity

 

The tin lid on the market is wheat gluten. I know not the circumstances, or the reasons for them, but one producer had their factory burn and the second announced a five week maintenance closure. Two weeks ago, the market was at €1650, the fire took it up to €1850 instantly, and yesterday one available load was being hawked at €3600! One can’t make stuff when suppliers wave ‘force majeure’ clauses, so this is seriously impacting spot prices, and it seems unlikely we will return to the old pricing level once full production is restored. 

 

So it’s not a happy Christmas message I’m afraid, but when the books do finally close and you knock off for the holidays, however short, I wish you a Happy Christmas and us all a prosperous but, above all, a healthy New Year.


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



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