Ornua developing price risk management for dairy industry

In the afternoon session of the IFA/FC Stone conference in Portlaoise today, Ornua outlined how they are managing to develop price risk management for the industry.

Jack Kennedy

4 May 2016

Ornua developing price risk management for dairy industry

Pictured at a conference in the Heritage Hotel in Killenard, Co Laois: Brendan Gleeson, Deptartment of Agriculture, Charlie Hyland, FC Stone, Diane and Joe Thome, Wisconsin Dairy Farmers, Joe Healy, IFA President, Liam Fenton, FC Stone and Sean O'Leary, IFA Dairy Chairman. Picture: Finbarr O'Rourke.

Bernard Condon, director of dairy trading and ingredients with Ornua, explained how Ornua have recently employed a new head of commodity trading for performance and risk management. He also suggested that last month saw the finishing touches to a plant in Saudi which would again improve the portfolio of products that Ornua can offer customers of Irish dairy commodities.

Bernard also explained that Ornua had facilitated Irish processors in developing some of the fixed milk price offerings on the market at the moment. He said, “We allocate against a brand – in this case Kerrygold, and almost 10% of our product is fixed against that.”

He went on to explain that it is companies with big brands who are easier deal with, in terms of fixed pricing, in order to get security of supply. The afternoon finished with a panel discussion on the next steps to facilitate an Irish or EU forward milk pricing model.

Future milk hedging will not improve price