10 October 2019: Skimming the profits off butter

Cracked record time: SMP up €60 on edible and €40 on feed grade.


Looking beyond the enormous oversupply of ex-intervention stock slowly being dribbled out in a managed sting, there are other factors acting on the market. Skim production is reckoned to be 2-3% down, year-on-year, which isn’t overly bullish taken alone, but apparently butter prices have dived and producers are demanding more yield from the skim component. Also, buyers diving in has exacerbated ballooning prices. In short, none of the players on the supply side of the equation (the intervention long stock holders, milk dryers or butter producers) see any reason to tip skim milk powder into oversupply.


The whey market is certainly not unaware of its relation’s relative riches. Supply is definitely available, but producers are starting to hold back on deliveries, to edge the market higher. While it is only €10 higher in Holland this week, it is worth noting that it has risen €40 in the last month, and even in Spain, a traditionally cheaper market, we see prices on the march upwards.


Sterling weakness reflects the path the political party formerly associated with fiscal prudence is taking the country on to our new status as a banana monarchy.


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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