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Ireland is ideally placed to develop Europe’s first dairy sector futures and options index.
Speaking at the IFA-hosted ‘Making Risk Management Work for Farmers’ seminar in Co Laois, representatives of Ornua, ICOS, Department of Agriculture and financial brokerage FCStone agreed that an index would be vital platform upon which to build an Irish commodity price hedging industry. Seminar attendees heard how US farmers manage price volatility by taking fixed prices for 20% or more of their annual milk output. Either individually or via their co-ops, the US farmers take “Class II milk future quotes”, fixed prices for future milk output set by the Chicago Mercantile Exchange.
