The news that Kerry Group has developed a futures market option for its suppliers has been welcomed by the Chairperson of ICMSA’s Dairy Committee. Gerald Quain said that the option could prove to be another valuable tool in the ongoing effort to mitigate against what he called the “ruinous” price and income volatility that is so destructive and undermining of the state’s dairy farmer base. Mr. Quain said that he expected Kerry suppliers to seriously consider the option as they tried to hedge against what was still a very fluid situation – albeit one that he believes is turning in favour of the farmer-supplier – and he said it is important that Kerry Group provide as much clarity as possible on the workings of futures markets and the basis of the price being offered in terms of the application or non-application of bonuses and penalties.
“ICMSA has always stressed that it is in everyone’s interest to end this extreme and wildly fluctuating peak-to-trough cycle that completely exposes farmers with borrowings or even – as we saw just a month ago – farmers with fodder issues and increasing input costs. We have to systematically look at the whole sector and the supply-chain and identify the points where extreme and sudden pressures can be exerted that cause this kind of really abrupt price collapse that, in turn, collapses income”, he said.
“We have repeatedly highlighted this as possibly the single biggest challenge facing the sector and we believe that this Futures option can be one of a suite of measures – along with a Government regulated deposit scheme – that can be used to address that volatility. The futures option is a positive development and farmers should carefully consider its relevance and applicability to their business at this time, concluded Mr. Quain.
Ends 6 June 2018.
Ger Quain, 086-3623041
Chairperson, ICMSA Dairy Committee
Cathal MacCarthy, 087-6168758
ICMSA Press Office