3 May 2019

First of all, sorry for the late transmission, which is down to the rare combination of church and state holidays in Europe back-to-back; it’s not often Karl Marx rubs shoulders with the Vatican.

Skim milk continues its inexorable march north, up €40 on the week, whilst whey flatlined throughout the whole of April. With not a shred of market gossip to attach to this week’s rise in SMP, it’s worth taking the long view of the price relationship between the human consumption and animal feed market prices for skim. Over the last three years, the premium for food grade has been as great as €250 and as little as €100. The spread was at its maximum last October, when quarter of a million tonnes of feed grade intervention stock was flogged off. Since then, food grade has put on €400, but feed grade getting on for €550. At the turn of 2019, the gap was still €250, but has now narrowed to €130.

To try and tease out what might be happening going forward, food grade has plateaued during April, whilst feed grade continued to close the gap, so perhaps the bull run of the whole skim milk market is peaking?

Meanwhile, the whey market is still in irons (a lovely old nautical expression for when a sailing ship is static, head-to-wind, with no driving force either way), held in balance between the lack of profitability compared to drying milk and poor cheese production, versus the reduction in export demand due to swine flu in Asia.

The money markets seem to be backing the peasants’ revolt in UK politics, judging by sterling’s relative buoyancy this morning against the backdrop of the wholesale rejection of party politics in yesterday’s local elections. Now the PM has managed to get cabinet leaks onto the front burner, the press aren’t hounding her over lack of progress as we drift ever closer to the next Brexit cliff edge….

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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