Markets continue to firm this week, but not with the savagery that we have seen of late, as sweet whey is only up €10 and skim milk €20 on the week. Physical supply has got noticeably easier, with the exception of hydrolysed wheat gluten, as four major suppliers have called force majeure and literally nothing is available for at least a fortnight. On the other hand, whey permeate is freely available, and even acid whey has reappeared. Background markets are remarkably strong for soya and palm oil, but proteins have survived a tumultuous week virtually unchanged, although it’s all been about wheat and oilseeds.

Looking back at the historical price graph for skim milk powder, it is significant that the market collapse in 2014 was caused by trade sanctions on Russia in the wake of the annexation of Crimea. Whilst the current disaster is overlaid on top of worldwide commodity inflation, today’s milk powder market does differ from the fundamentals in 2014, as there were still burdensome intervention stocks weighing on the European market then, and today we have near to zero stock.

Predicting how various sanctions will manipulate world market is beyond my ken, but looking solely at the known factors influencing milk powders, prices do look overcooked.

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