Futures market will determine Kerry fixed milk price

Kerry will give dairy farmers the opportunity to fix the milk price. This is possible from 12 June under the 'Kerry forward price scheme', based on the futures market. It is unique to the European dairy sector, giving dairy farmers the opportunity to become more resilient to the sharp price fluctuations in the market.

The suppliers to Kerry in Ireland will have the opportunity to place 1% to 10% of the annual contracted milk in the 'Kerry forward price scheme'. Fixing the milk price for a predetermined period is not new in Ireland and has been offered by various processors since 2015. What is new is that the futures market will become the basis for the milk price.

24 hours to decide
On Tuesday 12 June from 15 p.m., dairy farmers will have the opportunity to sign up. The offer they receive is a milk price of 00 cents per liter (with 31,30% protein and 3,3% fat). The offer is for delivery from June to October 3,6 and March to June 2018. Which is a normal delivery curve for Ireland. Almost all cows are dry there in winter. 

When the contract is opened, the suppliers have 24 hours to step in. Offering a so-called click contract based on the futures market will happen more often at Kerry, where the offers will decrease at a fixed price. "Hopefully it will become part of some of the things that suppliers are offered to address milk price volatility."

Herman van den Pol

Herma van den Pol has been with us since 2011 Boerenbusiness and has developed over the years into a market expert Milk & Feed. In addition, she can be seen weekly in the market flash about the dairy market.

h.vandenpol@boerenbusiness. Nl

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