Anyone expecting the milk powder markets to ease might well disagree with the above statement. Although sweet whey posted unchanged for yet another month, skim milk jumped by €20 to recover last week’s loss. On a recent tour of Germany, the intelligence seems to be that processors are choosing to store product rather than take lower prices, now that the FMD containment measures have retracted to only include Brandenburg and a couple of boroughs of Berlin. We all know that ends in tears when there is a sustained fall in whey markets, when prices fall out of bed to lower than cost of production, to clear the stored backlog, but there is another factor at play now.
That is the amount of whey and skim that is being consumed by an insatiable increase in demand for whey protein concentrate and milk protein concentrate, that is materially affecting the amount of primary material available for a still-buoyant feed market. What we lose on the swings in skim and whey we partially regain on the roundabouts in in terms of the cheaper byproducts of WPC and MPC, namely permeate and lactose, but the whole price basis looks to remain firm.
It's a topsy-turvy world when WPC at €2700 is €250 over skim when it traded happily at exactly the same discount under SMP, but that is caused by the demand that is coming from both edible and animal feed use.
On the other hand, we see farm gate milk prices at sustained highs, and pork at nigh on €2/kg deadweight, so processors argue that the end market can afford higher milk powder prices.
BDC agri is the UK broker for Lacto Production milk and whey powder products.
For further information and prices, contact Greg Dunn on 01206 598657 or greg@bdc-agri.com
