Farmer reluctance to sign forward priced contracts and dairy market volatility mean that Kerry Dairy Ireland does forward sell much beyond four weeks, the co-op's chief said.
Milk price queries were to the fore of many farmers' minds at Dairy Day.\ Claire Nash
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Kerry Dairy Ireland has said that it does not sell forward sell its dairy products by more than four weeks, due to recent years’ volatility in global dairy markets and farmers’ unwillingness to sign fixed price contracts.
“We sell product as we make it. We don’t go too far ahead into the market, that would be too risky, there has been too much volatility in the market over the last number of years,” the co-op’s CEO Pat Murphy said on Saturday at Dairy Day when responding to a question on the degree of insulation processors have to markets.
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“As we produce products inside in our factories, we sell those maybe two weeks, four weeks ahead, but we don’t go any much farther than that ahead.”
Murphy stated that the dampened farmer sentiment around forward selling milk through fixed milk price contracts limits the co-op’s potential to forward sell its goods on the market.
“We tried that going back a number of years ago with forward price contracts and they were getting good traction,” he said.
“But then 2022 came and farmers were kind of saying that they were locked in at 35c or 40c/l and now milk is making 55c/l, so they’ve got less of an attraction with farmers over the last two years,” the CEO told farmers at the event.
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Title: KDI not forward selling by more than four weeks
Farmer reluctance to sign forward priced contracts and dairy market volatility mean that Kerry Dairy Ireland does forward sell much beyond four weeks, the co-op's chief said.
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Kerry Dairy Ireland has said that it does not sell forward sell its dairy products by more than four weeks, due to recent years’ volatility in global dairy markets and farmers’ unwillingness to sign fixed price contracts.
“We sell product as we make it. We don’t go too far ahead into the market, that would be too risky, there has been too much volatility in the market over the last number of years,” the co-op’s CEO Pat Murphy said on Saturday at Dairy Day when responding to a question on the degree of insulation processors have to markets.
Factories
“As we produce products inside in our factories, we sell those maybe two weeks, four weeks ahead, but we don’t go any much farther than that ahead.”
Murphy stated that the dampened farmer sentiment around forward selling milk through fixed milk price contracts limits the co-op’s potential to forward sell its goods on the market.
“We tried that going back a number of years ago with forward price contracts and they were getting good traction,” he said.
“But then 2022 came and farmers were kind of saying that they were locked in at 35c or 40c/l and now milk is making 55c/l, so they’ve got less of an attraction with farmers over the last two years,” the CEO told farmers at the event.
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