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Madness - prices are going crazy

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Mobster
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2007/06/20 11:17:11 (permalink)
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Madness - prices are going crazy

You might recall the recent posts and much debated subject on whether or not price rises are coming and how customers might be taking the bulk suppliers for granted.

Well that was what - two weeks ago?? It has started and it seem, from two companies I spoke to yesterday, that it has started and quite possibly will be far worse that we predicted in those posts.

I have an outstanding invoice for WPC 80 and WPC 75 which needs to be paid at the end of this month. The WPC 80 (NZ) price has gone up 45% in the last two weeks - yes 45%. It had been predicted that it might rise some 50% by the end of summer and yet two weeks later. I've already agreed a price on a Euro sourced WPC 80 which is 40% higher than the two week price.

The other person I spoke to said that the lactose price, which is what together with skimmed milk powder, is driving the rest of the milk protein prices higher has risen some 5x from it's price last year. On that basis the cost price (based on what we suppliers were paying earlier this year) may still triple from it's current new price.

What does this mean for you. Baring in mind that WPC80 forms the base for most high street flavoured proteins when the price contract the bigger companies have with the milk processers comes to an end the bog standard 2lbs / 1-kilo tub may hit £60.00 - £80.00. Or, which is just as bad, formulas will change. Use of lower grade material (cellulose or WPC60 and down) etc etc in order for the companies to try and keep the price to within reason or what they feel the market will bare. But be warned prices will go up. Best to stock up while you can before the even higher prices hit all sections of the market.

 

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    THE IRON
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    RE: Madness - prices are going crazy 2007/06/20 11:21:36 (permalink)
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    Nice heads up there - Will be buying in a shedlaod of whey. Anyidea how long the shelf life is on a sealed sack of whey mate?

    I dont CLAIM to be a bodybuilder I AIM to be a bodybuilder!

    Me - not that long ago
    mart77
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    RE: Madness - prices are going crazy 2007/06/20 11:26:11 (permalink)
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    [Reply to Message]


    i wonder why the prices are rising in the first place, anyone know?
    The Graduate
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    RE: Madness - prices are going crazy 2007/06/20 11:39:51 (permalink)
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    ORIGINAL: mart77

    [Reply to Message]


    i wonder why the prices are rising in the first place, anyone know?


    Demand for dairy proteins and by products shot up from the asian market, particulary china and therefore supply is not being met. When something is in short supply, prices go up!

    Its an interesting time for the industry at the minute with margins being stretched on a weekly basis.

    stevie1977
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    RE: Madness - prices are going crazy 2007/06/20 11:53:52 (permalink)
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    Is that because the Chinease are moving into the branded supplement market?

    Do you really think it will come to that much of a price rise in this country?

    The bulk suppliers will go up as we are getting their best price.

    The branded stuff i'm not so sure about. You can get a 5lb tub of ON 100% Whey for $37 in the US, thats ~ £19, we pay £33 for it.
    Could they justify the price rise to us when we're already paying 75% more than the American market?
    post edited by stevie1977 - 2007/06/20 11:54:17
    anz3001
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    RE: Madness - prices are going crazy 2007/06/20 12:20:42 (permalink)
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    ORIGINAL: stevie1977

    Is that because the Chinease are moving into the branded supplement market?



    its not just used as a supplement, its also used in 'ordinary' foods i believe.so its probably more to do with that.

    play the hand you are dealt!!!

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    Mobster
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    RE: Madness - prices are going crazy 2007/06/20 12:23:14 (permalink)
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    ORIGINAL: stevie1977

    Is that because the Chinease are moving into the branded supplement market?

    Do you really think it will come to that much of a price rise in this country?

    The bulk suppliers will go up as we are getting their best price.

    The branded stuff i'm not so sure about. You can get a 5lb tub of ON 100% Whey for $37 in the US, thats ~ £19, we pay £33 for it.
    Could they justify the price rise to us when we're already paying 75% more than the American market?


    The Chinese are not buying branded whey - I have no idea why you'd think they are. Basically it has been stated many times that China is, in effect, coming online. I did mentioned the prices of skimmed milk - used everywhere - and lactose (used in some food products). These items are easier to produce and more profitable. It is reasonably easy for a processor to change to producing them and make a lot more money than they would on a WPC.

    Prices here and indeed worldwide have already go up - I said as much when I made the point about the invoice - the difference between the per kilo price OF JUST TWO WEEKS IS £1.80. That's not cost that is the difference.

    US AND UK prices will change. You are looking at a single example of a single product brought from 'ON'. 'ON' are a large enough company to be able to stock up on the lower priced raw material but once it's gone they go to the higher price.

    It is also worth stating that every company, US, EU or UK based based pays the same basic commodity price. What happens with any outside the EU sourced proteins is that a levy is added (in effect a tax) to imported protein. This is because of the subsidies granted by the EU to dairy farmers within Europe. Those farmers would be out of business if we, as I'd like to do, could import US etc protein without the levy. As you indicate it would be nigh on half price compared to now.

    Finally there is this idea that 'branded' use a different protein from the bulk guys. They do not. One or two of the better brands might specify specific ratios of nutrients for their products but they charge you more. If look at a 'branded' product it's list of ingredients will include 'whey protein concentrate' - it's the same unflavoured WPC 80 as sold by the bulk guys. A few of the bulk boys sell flavoured (we do) and that has the same items added to it as a branded name. And as the bulk guys (again like us) sell products using their own labels their products are also branded. I use and prefer the term 'high street brands'. Mypro and ourselves both sell a flavoured protein on a par with the 'ON' product for about the same cost as the US price (ie: 2 x 5lbs = £38.00 and we do a 5-kilo / 11lbs flavoured for a little more). When you consider the buying power of 'ON' the basic numbers don't quite pan out it's when you add in the extra staff, rent and advertizing etc the numbers make sense. With the rare exception or due to the extras added there is nothing to show that the bulk guy whey is somehow different from what you called 'branded'.

     
    Mobster
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    RE: Madness - prices are going crazy 2007/06/20 12:24:18 (permalink)
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    ORIGINAL: anz3001


    ORIGINAL: stevie1977

    Is that because the Chinease are moving into the branded supplement market?



    its not just used as a supplement, its also used in 'ordinary' foods i believe.so its probably more to do with that.



    Exactly right - that and the profit margins on the lower grade material and ease of processing for the same.

     
    CoNs
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    RE: Madness - prices are going crazy 2007/06/20 12:55:00 (permalink)
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    is it ever likely to drop again?

    or are we looking at a Whey version of the damn petrol prices!
    stevie1977
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    RE: Madness - prices are going crazy 2007/06/20 13:13:46 (permalink)
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    ORIGINAL: Mobster
    The Chinese are not buying branded whey - I have no idea why you'd think they are. Basically it has been stated many times that China is, in effect, coming online. I did mentioned the prices of skimmed milk - used everywhere - and lactose (used in some food products). These items are easier to produce and more profitable. It is reasonably easy for a processor to change to producing them and make a lot more money than they would on a WPC.


    I meant are the Chinese starting to produce supplements, not are they buying branded Whey. I didn't think they would produce enough food products to impact the market this much.

    ORIGINAL: Mobster
    Prices here and indeed worldwide have already go up - I said as much when I made the point about the invoice - the difference between the per kilo price OF JUST TWO WEEKS IS £1.80. That's not cost that is the difference.

    US AND UK prices will change. You are looking at a single example of a single product brought from 'ON'. 'ON' are a large enough company to be able to stock up on the lower priced raw material but once it's gone they go to the higher price.

    It is also worth stating that every company, US, EU or UK based based pays the same basic commodity price. What happens with any outside the EU sourced proteins is that a levy is added (in effect a tax) to imported protein. This is because of the subsidies granted by the EU to dairy farmers within Europe. Those farmers would be out of business if we, as I'd like to do, could import US etc protein without the levy. As you indicate it would be nigh on half price compared to now.



    All supplements are the same figure in £ as $, effectively making the US half price, not just Protein.


    ORIGINAL: Mobster
    Finally there is this idea that 'branded' use a different protein from the bulk guys. They do not. One or two of the better brands might specify specific ratios of nutrients for their products but they charge you more. If look at a 'branded' product it's list of ingredients will include 'whey protein concentrate' - it's the same unflavoured WPC 80 as sold by the bulk guys. A few of the bulk boys sell flavoured (we do) and that has the same items added to it as a branded name. And as the bulk guys (again like us) sell products using their own labels their products are also branded. I use and prefer the term 'high street brands'. Mypro and ourselves both sell a flavoured protein on a par with the 'ON' product for about the same cost as the US price (ie: 2 x 5lbs = £38.00 and we do a 5-kilo / 11lbs flavoured for a little more). When you consider the buying power of 'ON' the basic numbers don't quite pan out it's when you add in the extra staff, rent and advertizing etc the numbers make sense. With the rare exception or due to the extras added there is nothing to show that the bulk guy whey is somehow different from what you called 'branded'.


    I never said or implied that bulk whey is inferior in any way, i don't know where you think i implied this?
    I said the bulk supplies are bound to go up as we're getting their best price already and therefore they can't absorb any price rises, let alone rises in the region you are talking about.
    The 'high street brands' are a different matter as we don't currently get their best price in the UK. Whether they sell a tub in the UK or US, 'ON' still have the same overheads. Yes, theres shipping and import duty to pay but that isn't enough to justify a 75% price increase over the US price.
    The cost of the overheads will remain the same, only the price of the raw materials will increase (which i'm guessing is a low % of the rrp.)
    Also, it's not just 'ON' that make profit from this, theres the sites/shops we buy from, where buy direct from MP etc

    What i'm saying is (and figures are approx. for ease of sums), if 'high street brands' are currently £15 a kilo, bulk whey is £6 a kilo and the price goes up 100%. I could see price rises to £12 a kilo from MP etc but not £30 a kilo from the 'high street brands'.
    post edited by stevie1977 - 2007/06/20 13:25:12
    edinburgheire
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    RE: Madness - prices are going crazy 2007/06/20 14:38:51 (permalink)
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    Looks like we all may have to start eating protien from foods. Damn.
    post edited by edinburgheire - 2007/06/20 14:40:39
    theiopener
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    RE: Madness - prices are going crazy 2007/06/20 15:17:58 (permalink)
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    Oh well i guess ill have to be content that i use 10lb of whey for 6 months of PWO shakes . On a more serious note if whey is going up what about MPC?
    Mobster
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    RE: Madness - prices are going crazy 2007/06/20 16:20:12 (permalink)
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    I meant are the Chinese starting to produce supplements, not are they buying branded Whey. I didn't think they would produce enough food products to impact the market this much.


    No. They are using the profitable lactose and skimmed milk as explained later.

    All supplements are the same figure in £ as $, effectively making the US half price, not just Protein.

    As explained this is due to EU subsidies (so-called 'mountains' of over production and yet at a higher than US cost). The addition of any levy on outside EU wheys etc negates any price difference.


    Also, it's not just 'ON' that make profit from this, theres the sites/shops we buy from, where buy direct from MP etc

    Very true (Vydex used to say as much in their ads years ago).

    What i'm saying is (and figures are approx. for ease of sums), if 'high street brands' are currently £15 a kilo, bulk whey is £6 a kilo and the price goes up 100%. I could see price rises to £12 a kilo from MP etc but not £30 a kilo from the 'high street brands'.

    Completely depends on markups. At best 30% but among online resellers usually less (under 15% in some cases) and so if the raw material costs go up either margins are reduced to below the ability to trade levels or prices go up. If, as you mentioned before they are at the end of a distribution chain then the ability to absorb the price rise doesn't exist. H&B should be ok with their own brands as will GNC but those 'branded' products they resell will not.
    post edited by Mobster - 2007/06/20 16:23:01

     
    Mobster
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    RE: Madness - prices are going crazy 2007/06/20 16:20:59 (permalink)
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    ORIGINAL: theiopener

    Oh well i guess ill have to be content that i use 10lb of whey for 6 months of PWO shakes . On a more serious note if whey is going up what about MPC?



    ALL Milk proteins. The boss of Reflex said as much in the previously mentioned thread.

     
    Manimal
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    RE: Madness - prices are going crazy 2007/06/20 16:25:45 (permalink)
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    oh Sh!te, this is not good! Do you think this could properly fcuk up the Supplement market?
    dinot1985
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    RE: Madness - prices are going crazy 2007/06/20 17:29:56 (permalink)
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    The prices are going to continue to rise which is terrible. SciVation/Primaforce has decided to stop making Substance WPI after finding out theyd have to increase the price by 50% to come in profit. Other companies are expected to follow.
    post edited by dinot1985 - 2007/06/20 17:45:48
    WhiteSnake
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    RE: Madness - prices are going crazy 2007/06/20 18:29:53 (permalink)
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    It's times like this I'm glad I didn't give up the day job!!

    On a lighter note!.....I just ordered more Creatine and it's dropped a little in price from last time!!

    Barry
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    wally_cork
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    RE: Madness - prices are going crazy 2007/06/20 19:02:05 (permalink)
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    I think everybody on MT should buy a cow and we start producing our own whey...
    Problem solved. (make sure its a cow and not a bull, i dont want to have to explain to the the police again)

    Boditronics Ltd
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    RE: Madness - prices are going crazy 2007/06/20 20:21:01 (permalink)
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    Forum Software © ASPPlayground.NET Advanced Edition


    The situation is indeed serious , we have increased prices and have bought alot of product forward but the price still goes up and up .. the fact is this will not be sustainable this is not the housing market , if the price continues to rise at this rate many food products will become unafforadable etc etc . The Price will stabilse it always does its like oil .. in 1973 people were all gonna change to battery cars .. the price stabilsed and bang we are still driving internal combusters ..


    I used to sell microchips and we had this in the DRAM market every 3-5 years ..

    It will calm down it is just a symntom( sp ) of a growing market , which is a good sign . a few years ago the supplement industry was small and would not notice this type of blip now the fitness industry is big and everyone does notice

    For a while this is going to be a sellers rather than a buyers market ( by seller I mean the original producers of raw whey ) but it will turn round as sure as eggs are eggs

    As a famous philosopher from Monty Python once said

    " Blessed are the Cheese makers "

    Wurz
    Clubber Lang
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    RE: Madness - prices are going crazy 2007/06/20 20:34:42 (permalink)
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    thats just terrible news, just like my gear has risen in price aswell, 50p more for a shot of test E, bloody Iranians tigthening their borders lol
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