Farmers gain insights on value of milk-price hedging

Brokerage FCStone, the IFA and other dairy leaders are encouraging Irish co-ops to look at price hedging options to protect farmers against price volatility.

The IFA seminar ‘Making Risk Management Work for Farmers’ in Co Laois featured talks on global commodities from FCStone, as well as a presentation from US dairy farmer Joe Thome on how 18 years of hedging prices delivered near parity in income in that time, plus stability to plan his business.

A 10-year US study by Dimensional Fund Advisors showed that those who hedged on dairy futures broke even over that time.