A warning to those who buy protein. Which is everyone.

[huge908]

Not sure if this has been posted but it needs a re-post.

This is from Bruce, VP at Gaspari Nutrition:

"Guys,

I am pretty well plugged into the global commodities market for dietary supplements and sports nutrition. Even folks who might not care too much for me will tell you that I am "juiced in" pretty deep in Asia as well as with the protein vendors in NZ, Australia, etc.

There is a very big whey protein shortage brewing that will probably see the price of most protein supps (especially lower end stuff made from WPC 80 and caseinates) get really pricey in the next couple of months and soar through the winter. I am not sure how this will effect bigger companies that have contracts locked in for MT amounts per month but the smaller (and in many cases, the stupider) companies that spot buy WPC/caseinates are going to be pushed out of business. Ultimately, your choice as a consumer is going to be limited I would imagine unless you're just in it to buy REALLY high end stuff. Anyone who knows anything can tell you the price of WPC 80 and the caseinates went up about 30% since the start of the year. Yesterday I got a notice that for as of June 1st, a protein I buy for Gaspari is going up another 11%.

So what's going on? Two things.

First, the Chinese are buying up a motherload of the lower end whey for their own domestic market to make baby formula and "liquid food supplements" for sick people. With a bigger middle class, Chinese can now afford not to breast feed and they are buying baby formula at a monster rate. Since the melamine "issue" most Chinese who can afford to choose not to buy their own domestic whey - but they are gobbling up a ton of the stuff from India, Australia and New Zealand.

Second, two of the large soda companies (need I mention who?) are rumored to be coming out with their own RTD's that are WPC 37 and 80 based. The rumor is that between the two of them, they cornered much of the spot market buy buying HALF A BILLION KILOGRAMS of whey proteins of all sorts. That is an incomprehensible amount.

So what I have seen in the last few month is a large run on WPC's and caseinates and since the price of these up shifting upwards, I am seeing people who would not normally buy isolates go after them because the price differences between a lower end isolate and a medium concentrate or caseinate is becoming non-existent. And an isolate has a better margin/premium which allows for more profit/ability to discount than a concentrate where the mark up is (and I am not BS'ing you guys here) at best 30%-40% over cost. At some point it will become economically unviable for many smaller companies to put out WPC/caseinate products because they will not be able to make any money at all on it.



The larger protein companies should not be affected for another 6-9 months until their current supply contracts come up for renewal. You pay a little premium to "lock in" a price for 90-180 days and many times it turns out not to be needed this "protein insurance policy."

This time, those of us who were smart enough to play the "options game" with protein will be in good shape - these are the bigger companies. Most smaller companies can't buy 10 MT of protein at a whack (the minimum needed to lock in a contract typically). They are going to get bent over.

In the end, you will still be able to buy whey protein. You might see a huge increase in the price and "discounts end." Or you might see a sudden burst of isolate and hydrolysates on the market and concentrates/caseinates become scarce (with the excuse that companies want to sell a "better protein" which is indeed true - but not the real reason).

My sources tell me that they think the big beverage companies making RTD's are really overestimating the market for products like this (I think they have too) and are going to be stuck with a ton of expensive finished stuff nobody wants because it will be loaded with a ton of carbs to make it taste good for the masses.

Regardless, expect the remainder of 2010 and most of 2011 to be a bad stretch for people looking to purchase finished products that contain whey protein concentrate and caseinates for the most part (there will be exceptions of course - those of us who have contracts are good for at least another 90-180 on price).

Because of this, I am no longer giving out free samples of Intrapro or any other protein based product Gaspari Nutrition makes (Real Mass, Myofusion or Intrapro - I will still give out SizeOn samples because this uses a high end, expensive WPH that is pretty much predigested into di-tri peptides and not affected by the market spike in the price of other proteins).

If it were me and I liked a smaller companies cheap-o protein I would get it now while you can.

Good luck folks,


BK"

[Purge]

Saw this on another BB board. We'll see.

[agarci7]

hmmm...

[Adjusting]

Egg protein FTW!

[cuttin.bruh]

came in here expecting superdrol protein.

[ElMariachi]

Same situation as a few years ago, but much worse. You've got a lot of big companies sensing major revenue in protein so now you have companies like Gatorade putting out protein-based products(which honestly taste like ass) in hopes of winning over the Men's Health/Oxygen-reading, religiously post workout-protein-consuming demographic.

[cuttin.bruh]

Same situation as a few years ago, but much worse. You've got a lot of big companies sensing major revenue in protein so now you have companies like Gatorade putting out protein-based products(which honestly taste like ass) in hopes of winning over the Men's Health/Oxygen-reading, religiously post workout-protein-consuming demographic.

Have you seen the sugar in gatorade protein? :O

[Sun-Illin]

cliffs?

[sanugz]

So, MGN will be history, and we can buy Gaspari and other larger companies' protein for an unchanged price until 6-9 months later where the price will skyrocket thereafter for who knows how long....hmmm...

[cuttin.bruh]

cliffs?

pepsi, coke and China are buying stupid amounts of Whey, making it super expensive and making protein companies pay more, which means they charge more.

[Dacookie]

cliffs?

Low end protein prices going up soon

[homerunrbi]

I'll just switch to chicken and steak

[ElMariachi]

Have you seen the sugar in gatorade protein? :O

Yes and the stuff still tastes like absolute ****. Mind-boggling.

[MBSowards]

Low end protein prices going up soon

This is not what was being said. They will be going out of business most likely, not raising their prices.

[captainmo55]

Yes and the stuff still tastes like absolute ****. Mind-BOTTLING.

Fixed lol

[ElMariachi]

This is not what was being said. They will be going out of business most likely, not raising their prices.

OH NUTS! No more generic, garbage SciFit protein? I sad.

[HITsoldier]

China is just gobbling up the world, and dare I say, going to finish off any country struggling.

brb marrying Chinese women and moving.

[Tyler44]

OH NUTS! No more generic, garbage SciFit protein? I sad.

garbage? Strong words.

Do elaborate on how our whey is garbage since you are so noble and wise.

[trainhard8624]

OH NUTS! No more generic, garbage SciFit protein? I sad.

please, do tell

[primetime32]

This sounds more like an attempt to create hysteria and help some protein companies unload excess protein. From what I have seen, protein prices are not going up, if anything there is too much protein on the market.

[VaughnTrue]

OH NUTS! No more generic, garbage SciFit protein? I sad.

garbage? Strong words.

Do elaborate on how our whey is garbage since you are so noble and wise.

please, do tell

You guys shoul kick him in the junk. Straight shot to the jimmy.

[BrettSmity]

This sounds more like an attempt to create hysteria and help some protein companies unload excess protein. From what I have seen, protein prices are not going up, if anything there is too much protein on the market.

MGN Protein has been on backorder now for awhile. This is the second person I have seen tell the consumers about the shortage of whey protein. Deff. seems legit to me.

Does anyone know if XF whey/up 2.0/cytofuse will be alright for awhile or what?

[MBSowards]

This sounds more like an attempt to create hysteria and help some protein companies unload excess protein. From what I have seen, protein prices are not going up, if anything there is too much protein on the market.

x2 who cares what people in the industry are warning us about.

I say we should go with "what it feels like."

[Incinerated]

anyone else here with a finance degree lol he said `played the options game`then realized they didn`t hedge for ****?

[Recawn]

Here in NZ our primary dairy distribution company (fonterra) is planning to increase payouts for milk solids due to demand (mainly from asia/china), which partly verifies what was said in the OP. Well if the prices do go up i can just go back to high quality home grown NZ whey.

[ka3s3r]

protein is the most made thing how could we run out of it?!?!

[bassbehemoth]

[BioStrong]

Do you have a link to the article's location?

[xlb57]

lol

[eldawg]

Egg protein FTW!

"A rising tide lifts all boats." Expect all (whey substitutes) to also go up as everyone starts looking for alternatives companies look to make up lost margins.