This won’t be an easy read. The considered opinion of the milk powder market, in France at least, is that it's jiggered for the next year.

Lacto Production attended a food industry expo in Rennes this week, and the almost united view amongst a dozen milk processors is that the milk powder market will remain in undersupply possibly well into the first half of 2022. Here is some of the reasoning offered:

• Milk is at peak production, and only down 0.5% on last year

• Usual stock building of milk powders during the spring isn’t happening, thus continuing squeeze into next winter

• Sweet whey demand from China has allegedly decreased

• Veal production has decreased, reducing demand for sweet whey

• Larger quantities of liquid whey are going for whey protein concentrate for bodybuilding

• Middle market traders are offering to buy H1 2022 sweet whey powder at €960, just €70 under spot values

Given the overall reduction in demand is still not acting on price during peak production is extremely concerning for the autumn and winter markets. Soya meal may have tumbled $70 since the second peak during May, but bean oil is still the wrong side of 70 cents, and it is that market which palm oil and coconut oil price off, so the bigger picture will remain related to the global protein complex.

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