Now that it’s early December, half of the 2023/24 season will have been written into the history books, from the volume of rain that fell in each month to how many kilograms of milk solids you have sent to the factory.
What does not get written into the history books until well after the season has ticked over on the calendar is the actual price you will be paid for the milk solids supplied to the factory.
Agriculture is built on the premise of producing something from the land under the expectation of being able to sell the produce at a profit.
Other businesses outside of agriculture operate under very similar conditions, with a price expectation built into every operation within. But for most, the determination of price achieved happens a lot faster than it does in the dairy industry.
We think that we have to carry this risk each and every day, leaning on the “it’s just how it works here” mentality.
The financial instruments aptly named “futures” were developed to trade the future risk of wheat prices between all users of wheat, from the farmers selling their produce through to grain merchants selling wheat to the end user – these financial instruments provide the ability to transfer risk from one person to another, and thus creating some certainty.
You are already managing all the costs and inputs on farm, so why not look to manage the revenue aspect of your business at the end of the season?
There are multiple ways to manage milk price risk in NZ, from Fonterra’s Fixed Milk Price offerings through to engaging a futures broker to help you understand the milk price market that exists to help you remove risk from your business.
Schedule A Call With An Expert Today!
Use the form below to request a quick 15-minute discovery call with a dairy market expert to learn how to gain
strong insight into global dairy markets and discuss strategies that best fit your company’s risk strategy.
Stu Davison
SENIOR MANAGER, GLOBAL MARKET INSIGHTS
A true Kiwi dairy farmer at heart, Stu hails from a long line of dairy farmers in the Waikato region of New Zealand, often regarded as the heart and soul of the country’s dairy industry. His upbringing in a family deeply entrenched in successful farming ventures instilled in him a strong foundation of business acumen and a keen awareness of the global dairy market's importance. Stu's journey into the world of agriculture and finance began with his studies at Lincoln University. Afterward, he dedicated eight years to hands-on dairy farming, gaining invaluable insights into the practical aspects of the industry. This combination of education and real-world experience uniquely positions him to understand the intricacies of dairy farming, from both financial and operational perspectives.
Prior to joining HighGround Dairy, Stu spent three years leading the NZX Dairy Insights team, where he made significant contributions to the dairy industry's knowledge base. His expertise in data analysis and market trends garnered him a reputation as a trusted authority. Stu's passion for New Zealand agriculture, combined with his financial market savvy, allows him to view the global dairy market from a privileged vantage point. His perspective is a valuable asset as he crafts unique insights for one of the world's most influential dairy exporting markets, as well as across all key international dairy regions.
