CME Cash Market Summary
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Dairy price risk management services provided by dairy industry experts
Our experienced dairy industry consultants provide clients with full-service brokerage, market analysis, forecasts and advice.
Redefining dairy risk management
Our experienced dairy industry consultants provide clients with full-service brokerage and in-depth, one-on-one market analysis, forecasts, and advice. This helps participants understand and protect against the risk of price fluctuations in dairy products and inputs (including grains, energy, livestock and more) using a range of risk management tools.
We have boots on the ground with our leading team of economists, analysts and brokers located throughout the US, Europe, Asia and Australia. Our dairy team has been helping businesses navigate volatile dairy markets for over 20 years.
Our dairy group works with all steps along the dairy supply chain from dairy producers, traders, manufacturers, right through to retailers. We work closely with the vast majority of top global dairy companies.
Dairy market services provided
Consulting
- Policy & Procedures
- Hedge Strategy Design
- Market & Strategy Analysis
Market Intelligence
- Global Insights
- Market Analysis
- Education
Brokerage
- Exchange, OTCs, US Spot Call
- Clearing: CME, EEX, SGX-NZX
- US Spot Call Physical Delivery
Our clients have access to the complete range of exchange traded risk-management products offered by exchanges around the world including the U.S., Europe and Singapore. These include exchange-traded futures and options, proprietary OTC trading tools and cash-market instruments.
We also provide dairy market analysis through our StoneX Plus platform providing insights designed to help you make smarter business decisions. We also publish reports on a daily, weekly and monthly basis and host outlook webinars, and in person seminars as well as making ourselves available for one-on-one phone and email consultations.
Our dairy team speaks English, German, French, Polish, Spanish, Arabic, Mandarin, and Cantonese.
We offer dairy price risk management for:
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Who can benefit from StoneX’s dairy consulting, marketing intelligence, and brokerage services?
The FCM Division of StoneX Financial Inc. has partnered with Ag Hedge Desk to create a Dairy Revenue Protection decision tool that enables producers to:
- Find baseline coverage based on their exposure to Class III and Class IV CME milk futures prices, quarterly production, state, and other metrics
- Compare alternatives
- Optimize coverage
This simple tool can deliver straight-forward views into what Dairy-RP might be suitable for you.
Does StoneX offer dairy revenue protection?
Yes, StoneX does offer dairy revenue protection. To learn more, click this link.
USDA Dairy Revenue Protection (Dairy-RP) is a risk management program for US dairy producers. Administered by the USDA, it offers insurance coverage against drops in milk prices or production. Producers can purchase policies based on future milk prices, providing financial compensation if revenue falls below a guaranteed level. Dairy-RP aims to stabilize income and mitigate market volatility. Policies are customizable and purchased through authorized insurance agents. For the latest details, consult official USDA and RMA resources or an insurance agent.
What are dairy futures?
Dairy futures are a type of financial contract that allow buyers and sellers to lock in a price for dairy products to be delivered at a future date. These futures contracts are traded on commodity exchanges, such as the Chicago Mercantile Exchange (CME), and are used by dairy farmers, Co-ops, processors, traders, distributors, end-users and retailers to hedge against price fluctuations in the dairy market.
For example, a dairy farmer might use a futures contract to lock in a price for their milk for delivery in six months' time. If the market price of milk decreases in that time, the farmer will still receive the price agreed upon in the futures contract, protecting them from potential losses. On the other hand, if the market price of milk increases, the farmer may miss out on potential profits but will still receive the agreed-upon price in the futures contract.
Dairy futures contracts can be used to trade a variety of dairy products, including milk, cheese, butter, skim milk powder, whole milk powder and whey. They are settled in cash at the end of the contract period, rather than by physical delivery of the dairy product.
How does dairy risk management work?
Risk management in the daily industry involves various tools that are implemented to manage the risks associated with dairy commodity price volatility and other factors that can affect profitability throughout the entire dairy supply chain. Some of the common risk management strategies include:
- Hedging with futures contracts: As mentioned earlier, dairy farms, processors, and distributors can use futures contracts to lock in a price for their products and help protect themselves against price volatility.
- Forward contracts: Similar to futures contracts, forward contracts allow buyers and sellers to agree on a price for the delivery of dairy products at a future date. These contracts can be customized to meet the specific needs of the parties involved.
- Options trading: Options are contracts that give the holder the right, but not the obligation, to buy or sell a specific quantity of a dairy product at a certain price, on or before a certain date. Options can be used as a form of insurance against price fluctuations.
Overall, dairy risk management involves a combination of these and other strategies to manage volatility in dairy commodity prices, and help protect against extreme price moves.
Boots on the Ground: EU Dairy (Ireland)
Join Liam Fenton, Global Head of the Dairy & Food Group at StoneX, in the countryside of County Limerick, Ireland, as he explains the value of getting his boots on the ground on the Fenton family dairy farm, and how leveraging insights gained while growing up on the farm help him advise “from their side of the table.”
Join Liam Fenton, Global Head of the Dairy & Food Group at StoneX, in the countryside of County Limerick, Ireland, as he explains the value of getting his boots on the ground on the Fenton family dairy farm, and how leveraging insights gained while growing up on the farm help him advise “from their side of the table.”
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The trading of commodities and derivatives such as futures, options, and swaps involves substantial risk of loss and may not be suitable for all investors. Advisory services as well as the trading of futures and options is available through various subsidiaries of StoneX Group Inc. including but not limited to the FCM Division of StoneX Financial Inc. Public Disclosures for the FCM Division of StoneX Financial Inc. The trading of over-the-counter products or swaps is available through subsidiary StoneX Markets LLC to individuals or firms who qualify under CFTC rules as an eligible contract participant. Please click here for the full disclaimer.