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25 September 2019: politics and milk powder markets both in uproar

It’s difficult to know what to start with, as politics and the milk powder markets are both in uproar, but I’ll kick off with milk. The fundamental change this week is that whey has bounced, up €30 in Holland, most probably because of a 3% reduction in European milk output during August, but helped along by dryers switching to more lucrative skim milk production. My feeling is that my long-awaited whey dumping from the USA ain’t going to happen this side of Christmas, so it’s time to throw in the towel on Q4.

Skim has firmed another €40 this week on both edible and feed grade, now up a full €200 in two months, which is a 10% hike. Whilst I have tipped this continuing rise and I can’t see it stopping just yet, it always comes down to the ridiculously high stocks in the long-holders’ hands, and that is what convinces me we won’t return or surpass the €3300 skim milk powder we saw at the beginning of 2014. It is also worth remembering that the market stayed north of €3000 for a whole year, so I don’t expect a cliff face graph when the market does break. This is the heavy time of year when winter CMR contracts are usually fixed, and sellers are feeding off the reluctant post-summer rush of buying interest, but November could be the earliest we’ll see any break.

I’ve been tracking the pound through the day, and surprisingly it has only weakened half a cent, considerably less than the government’s position. Whilst Jezza sits uncomfortably on the fence, and Borisconi’s financial peccadilloes are overshadowed by the porkies he told HM, it’s surprising to see the pound relatively buoyant at levels that are presumably close to the bottom of the range. If the Halloween extension is pushed through, and the election called, then we’ll probably see three or four cents off, but quite frankly, any predictions are useless in this terrible mess.

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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