Fix the purchase or sale price of Gouda Cheese

Buyers and sellers of Gouda cheese will soon be able to hedge against price movements on the cheese market. The company Stable, active worldwide in managing price risks of agricultural products, and DCA-Markets make this possible. 

The 2 companies announced this on Wednesday (July 14). The American group Stable offers a platform where buyers and sellers of agricultural commodities can directly manage the price risk. The company looks for commodities for which there is no regulated futures market. DCA-Markets, the Price Reporting Agency from Lelystad, supplies Stable with the independent reference price on which the contracts will be settled.

Price indices as reference prices
DCA-Markets, part of the DCA Group, puts together a weekly series of dairy quotations, including milk powder, spot milk, butter, cream, Gouda and Edam foil cheese, cheddar and mozzarella. “Our price indices are widely used as reference prices and benchmarks to settle physical contracts. These DCA quotes now also serve as a reference price for Stable's risk management tools.”

This starts with options on the listing of Gouda foil cheese that DCA-Markets puts together on a weekly basis. Stable: "This instrument is custom-made, has a low risk and no margins or maintenance requirements. Which is an important advantage over other solutions in the market."

Game changer in the dairy market
Stable further states that all contracts are backed by A-rated reinsurers. In this way participants can literally assure themselves of a floor or ceiling price for Gouda cheese. It is the intention that this type of option constructions will also be introduced for other dairy products with a DCA listing.

Richard Counsell, the CEO of Stable USA, said in the statement: "As the son of a dairy farmer, I know first hand how important hedging price risk is to our industry. We are pleased to bring our risk management services to the dairy market, which can be a game changer in our view. We want to help companies invest in the future."

Eric the Thrush

Eric is a member of the editorial staff of Boerenbusiness. As a descendant of an arable family, farmer's blood flows through Eric's veins. He considers himself a generalist, but with a preference for economics, trends, markets and marketing.

e.delijster@boerenbusiness. Nl

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