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21 October 2021: Of Black Swans & Grey Rhinos

Updated: Dec 16, 2021

I may have come to the party about 18 months late, but I’ve been reading up on both Black Swan and Grey Rhino theories. In other words, the current combination of the unpredictable event of COVID occurring with the (some say) slow moving and predictable danger of climate change. The common thread is that both are predictable with 20/20 hindsight, but we’re still the wrong side of the current bull charge in worldwide commodity markets to second-guess how it came about and why it peaked.

There’s no good news in milk powders this week, skim milk up €90 this week on top of €70 the week previous, and sweet whey up €30 two weeks running. The soya market is flat on beans, down on soya meal, and about 6% up on soya oil, which has pumped up palm and coconut markets again, after taking a breather through September.

Looking first at skim, the public price of €2850 is well under the real market faced by purchasing managers, and the scarcity of liquid milk is, I think, now secondary to the processors being greedy and withholding stock to force this market until the pips squeak, and we all know how that ends, with a steep decline. Blenders are now buying part-loads wherever available and the situation is pretty desperate. Quite how a slight imbalance between demand and supply of liquid milk can send the skim market back to ‘Peak Oil’ levels of 2008 is increasingly suspicious.

The tenor of the sweet whey market has changed, as previously it has been well supplied by cheese processors, but the recent uptick is cited by traders to be caused by lack of milk supply. Physical supply is still plentiful, but traders play their game.

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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