Dairy market volatility: Can we hedge our bets to protect Irish farmers?

Dairy market volatility has been at the back of most farmer’s minds over the last couple of years. But it was probably quite far back — right behind expansion plans, capital expenditure, cow numbers, grass management, and all the day-to-day stuff they have to deal with as a business.

Co-operatives and the Irish Dairy Board have been developing strategies to deal with market risk over the past number of years, and some of them already have a fair portion of their milk locked into fixed price schemes that take the worst out of the volatility. As well as ensuring a proportion of processors’ revenues, it is also in their producers’ best interests as it bolsters milk price.

ICOS has been working with institutions such as Cork Institute of Technology, the Department of Agriculture, and risk managers like FC Stone to raise awareness of the worst impacts of volatility and to get farmers to a position where they would consider some sort of insurance against low prices.