Tom Benson, Vice President Strategic Sourcing
Milk and Dairy prices have been mixed in August and September. Milk prices have leveled off after a significant run-up in NFDM and MPC markets. US product demand appears to be strong globally as more customers diversify their supply base away from Oceania and buy more volume from the US. We see prices on Milk and Milk Proteins to continue their strength through 2013 and predict possible downside pressure in Q1 of 2014.
Whey Powder and Lactose are showing weakness as more and more production capacity is being created and lower cost alternatives are being formulated in on the traditional demand centers for the Dairy Sugar base. WPC 34 has gained considerable momentum into September and is putting pressure on the entire market. Markets have gained 15% from their lows earlier in the year and have the potential to gain an additional 15% in the next three months. WPC 80 is showing price increases as demand continues to be strong, which is only partially being off-set by newer production. WPI however, looks to be even stronger as the demand growth has not been matched by equal production increases.