Tom Benson, Vice President Strategic Sourcing
With summer coming to a close, we have seen increased volatility from not only the heat and market conditions but also by another scare of potentially contaminated dairy powder in China. While cheddar and butter markets have faltered in the past month, milk powder markets have found a high, but stable price range and many believe that the price has little chance of going down substantially by the end of 2013. These same people also believe that milk powder prices may increase still, however does not seem to be likely.
Dry whey markets and lactose markets have a bearish feel while WPC 34, WPC 80 and WPI have gained momentum in the last 3 to 4 weeks. Demand for both high protein milk and whey products has jumped in August as most buyers brace for higher prices in the fourth quarter.
Feed costs look attractive to farmers for 2014 at the moment, which should spur more milk production and take pressure off milk powder prices come 2014.