A new trading platform for milk has been hailed as a way of locking in profitability in the often-volatile dairy sector.
A new hedging market for milk has been launched today with a promise to mitigate financial risk in the often-volatile dairy sector.
The Australian Milk Price Initiative will be run on the Mercari platform and will be co-managed by the Australian Dairy Farmers group.
Various bids across Victoria’s three dairy regions were made on the inaugural day of trade with prices exceeding $9.00/kg milk solids for the spot market.
Individual months in the new season traded above $8.00/kg milk solids.
ADF president Rick Gladigau said the AMPI will improve risk management across the supply chain with back-to-back pricing from customer to processor to farmer.
“There is no more transparent price signal than an open market price,” he said.
“(The) AMPI will improve risk management across the supply chain with back-to-back pricing from customer to processor to farmer, providing the ability to lock in margins across the chain.”
Federal Agriculture Minister David Littleproud said the new market will allow dairy farmers to be more active managers of their milk supply.
“This new trading platform will allow our dairy farmers to leverage their competitive advantage and will drive investment and growth in the industry,” he said.
The new dairy market will be available between 2.00-2.30pm Eastern Standard Time on two Thursdays of each month.
It has been a transformative periof for dairy trade in recent times with a number of platforms attempting to shake up the traditional processor model.
Last year, two major bids were tallied for the Melbourne-based Milk Exchange group’s inaugural online auction.
The Melbourne-based trading platform’s first auction in April 2021 had 89.8 million litres of new season milk on offer from 34 farmers from Victoria as well as the Hunter Valley and Southern Highlands regions in NSW.
Original article sourced from https://www.weeklytimesnow.com.au/