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9 May 2019: 'It's confidential' Brussels

Not often do we see the two pillars of milk powder moving in different directions, but that's what's happened this week.

To quote Sylvain Fournier, skim milk is 'uncontrollable', up another €50 on last week (now €1880), and isn't far off three year highs now, and those peak prices date back to 2014 pretty much. However, the average price for the entirety of 2013 was €3k per tonne, so we just have to face it that a year ago, when SMP bottomed at €1300, it was too cheap.

There was a recent article in the French dairy press that contained this quote from the president of the European Milk Board:

'Brussels refuses to tell us who bought this milk powder. It's confidential.'

The 20/20 hindsight commentators (like me!) are saying that Brussels threw away €140m by setting the selling price too low. But whoever is sitting on a quarter of a million tonnes of the stuff can ride this market higher, then lower, and still be hundreds of quids in. They certainly have long pockets: it's over €300 millions' worth they've shelled out.

Regarding whey, time was when one commodity shot up whilst the other stayed unchanged, the old trading adage was to buy the latter, pronto, but that seems unpopular advice today with whey losing export demand from SE Asia. It's down €10 in France and €20 in the Netherlands, but I worry how far it can slide given the headlong rush by processors to dry milk and cash in on the traders' bonanza.

The pound remains broadly unchanged, as do the positions of everyone jostling for leverage in the Brexit debacle. Jeremy is under orders from his Kremlin handlers to deny the Labour rump demanding a people's vote, Teresa says she isn't the problem, Vince claims the council elections were a second referendum and Nigel, well, makes a lot of noise.

See also this article by Jane Byrne of Feed Navigator for a view of the likely impact of African Swine Fever on Chinese demand for whey powders.


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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