No futures solution yet in dairy slump
The reality, according to ICOS, is that the European dairy futures market is in its infancy, and volumes being traded are quite small, although it is hoped dairy futures markets and other such derivatives will eventually offer enormous potential as risk management tools. Commenting on a report which suggested that Irish co-ops declined a possibility to “lock in” fixed milk prices, in order to protect against milk price volatility, an ICOS spokesperson said some industry players have traded small volumes on financial markets, but only as a test and to develop skills.
ICOS supports development of financial risk management tools and will encourage co-ops and farmers to adopt them, when they are ready and fully fit for purpose — but those tools are not yet precise enough to depend on.
