15 May 2019: Skim is up, whey went sideways and the pound went down

Same old, same old, again this week, I’m afraid. Skim is up, whey went sideways and the pound went down.

There are two Dutch firms who are coining it on skim milk. You have to hand it to them, they saw the price of skim was at a historic low, they had deep enough pockets to buy the intervention stock, the market of last resort, and they had the brass neck to corner the market.

Whether the howls of anguish from the politicos and the press about Brussels selling the family silver will come to anything, I doubt, unless they can prove a cartel was established, but that would be way down the road, after the mega-profits have been trousered by the traders. Let’s look at history again, whether one considers it bunk, or not.

This graph shows the trajectory of the skim market for the last three years, and this year is following nearly exactly the Q2 pattern for 2017, and that ended in tears by the end of Q3. But something tells me that because the stockholders are long and strong, we are unlikely to see a repeat of two years ago.

Whey is still responding to the equal forces of poor cheese production and lack of export demand, although I feel that it hasn’t addressed the enormity of the reduction in demand from China alone (a reduction of some 40,000t of lactose), but time will tell. But if skim is still relatively high when that demand situation turns round in the future, it will be lighting the blue touch paper time.

The pound continues to disappoint importers as much as our politicians do. Enough said.


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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