Tasmanian dairy farmers can reduce their exposure to market volatility through Fonterra’s Fixed Base Milk Price initiative.
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Farmers can lock in a set price for up to 70 per cent of the season’s milk.
Existing Fonterra farmers and new suppliers who want to supply Fonterra in the next season can apply.
Fonterra Australia Farm Source general manager Matt Watt said suppliers would have more income certainty during the season under this initiative.
“Volatility in dairy is a fact of life. From what we’ve seen over the last few seasons, commodity price and foreign exchange volatility is here to stay, so we want to do what we can to help our farmers manage this volatility,” Mr Watt said.
Fixed Base Milk Price works in a similar way to locking in part of your home mortgage at a fixed rate before the season starts.
“This initiative also enables suppliers to lock in the price against their existing production curve – providing security for those producing the majority of their milk in the spring, as well as those who have a year-round supply pattern,” he said.