Dairy farmers in New Zealand have a new tool in their risk management tool box. NZX, the company who operates New Zealand’s stock exchange, announced futures markets and options for dairy farmers available in May 2016.
Milk prices tend to be extremely volatile in New Zealand because 95% of its milk is exported. According to company officials, farmers in New Zealand have for years longed for a tool to manage milk prices similarly to their overseas counterparts.
“The futures and options contracts address a growing demand from producers and purchasers of milk products wishing to manage risk around price fluctuations,” officials say.
The futures contracts and options offered by NZX will allow producers to gain control of price swings. The company warns farmers will need to learn more about marketing to take full advantage of the new market. Learn more at NZX.com.
By: Anna-Lisa Laca
Source: Milkbusiness.com