Milk price makes up over 50% of risk in a dairy farm business, and increasingly more farmers are adopting milk hedging options to make their income less risky. Some 20-25% of dairy farmers and manufacturers are using milk hedging tools, but how do farmers find out where to start, and what the risks are? 

Hear from experts on some key points to be aware of on various hedging options, and from a farmer who has been fixing his milk price for years.

Guests include:
James Atkinson, Derivatives Sales Manager, NZX
David Jensen, Bay of Plenty Farmer
Brett Wooffindin, Director, Lawson Avery Limited

Hosts:
Sheryl Haitana, Editor, Dairy Exporter
Anne Lee, Deputy Editor, Dairy Exporter

NZX Derivatives Sales Manager James Atkinson says it takes time for those in the dairy space to develop and understand the tools they have, to manage the risks from milk pricing. He discusses the difference between Milk Price Futures and Milk Price Options, and the benefits and risks of both. He says these tools are generally harder to understand, so it’s been encouraging to see an uptake in the number of farmers using them.

Bay of Plenty farmer David and Lesly Jensen have been farming just over 700 cows on the family farm since 1992. He’s been fixing milk prices since Fonterra first offered it some time ago, and having spent time in the Northern Hemisphere observed that it's very normal for farmers there to fix their biggest prices: milk and feed. 

Their business also includes kiwifruit, which he says has far more fluctuation than pastoral farming, so fixing costs is a good way to minimise risk across the business. 

Director of Lawson Avery Limited Brett Woofindin says rapidly rising interest rates caught a lot of people by surprise, and a lot didn’t have a chance to lock them in before they got too high. As a result, they’re seeing a lot of farmers struggling with the interest growing on their debt, and a lot are left floating. He discusses different strategies farmers can use to fix costs, to navigate these tough times as best suits their farm business. 

He advises farmers to talk to their accountants or bankers about how best to manage risk within their business.

Links mentioned in this episode:
Watch: The NZX webinar from the NZIPIM Conference
Watch: NZX hedging academy videos

Read more from the Dairy Exporter: Fixing a future

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Milk price makes up over 50% of risk in a dairy farm business, and increasingly more farmers are adopting milk hedging options to make their income less risky. Some 20-25% of dairy farmers and manufacturers are using milk hedging tools, but how do farmers find out where to start, and what the risks are? 
Hear from experts on some key points to be aware of on various hedging options, and from a farmer who has been fixing his milk price for years.
Guests include:
<ol>
<li aria-level="1">James Atkinson, Derivatives Sales Manager, <a href="https://www.nzx.com/">NZX</a></li>
<li aria-level="1">David Jensen, Bay of Plenty Farmer</li>
<li aria-level="1">Brett Wooffindin, Director, <a href="https://lala.co.nz/">Lawson Avery Limited</a></li>
</ol>
Hosts:
<ol>
<li aria-level="1">Sheryl Haitana, Editor, Dairy Exporter</li>
</ol>
<ol>
<li aria-level="1">Anne Lee, Deputy Editor, Dairy Exporter</li>
</ol>
NZX Derivatives Sales Manager James Atkinson says it takes time for those in the dairy space to develop and understand the tools they have, to manage the risks from milk pricing. He discusses the difference between Milk Price Futures and Milk Price Options, and the benefits and risks of both. He says these tools are generally harder to understand, so it’s been encouraging to see an uptake in the number of farmers using them.
Bay of Plenty farmer David and Lesly Jensen have been farming just over 700 cows on the family farm since 1992. He’s been fixing milk prices since Fonterra first offered it some time ago, and having spent time in the Northern Hemisphere observed that it's very normal for farmers there to fix their biggest prices: milk and feed. 
Their business also includes kiwifruit, which he says has far more fluctuation than pastoral farming, so fixing costs is a good way to minimise risk across the business. 
Director of Lawson Avery Limited Brett Woofindin says rapidly rising interest rates caught a lot of people by surprise, and a lot didn’t have a chance to lock them in before they got too high. As a result, they’re seeing a lot of farmers struggling with the interest growing on their debt, and a lot are left floating. He discusses different strategies farmers can use to fix costs, to navigate these tough times as best suits their farm business. 
He advises farmers to talk to their accountants or bankers about how best to manage risk within their business.
Links mentioned in this episode:
<ul>
<li aria-level="1">Watch: <a href="https://youtu.be/RPEQ43_Q-1I">The NZX webinar from the NZIPIM Conference</a></li>
<li aria-level="1">Watch: <a href="https://www.nzx.com/markets/nzx-dairy-derivatives/dairy-hedging-academy">NZX hedging academy videos</a></li>
</ul>
<a href="https://dairyexporter.co.nz/fixing-a-future/">Read more from the Dairy Exporter: Fixing a future</a>
<a href="https://dairyexporter.co.nz/shop/spring-2024/">Buy the Dairy Exporter Spring Issue here</a>
SUBSCRIBE TO DAIRY EXPORTER  - <a href="https://dairyexporter.co.nz/sign-up/">EMAIL NEWSLETTER (FREE - WEEKLY)</a>
SUBSCRIBE TO DAIRY EXPORTER  - <a href="https://dairyexporter.co.nz/shop/">MAGAZINE ($59/YR FOR 4 JOURNALS)</a>

It’s been your mainstay in dairy farming since 1925 as your trusted source of adding
value to your dairy business, now it’s time for the Dairy Exporters’s seasonal stories
to exclusive weekly interviews to come straight to your ears with this brand-spanking
new podcast.


It’s here you can seek out the guidance, inspiration and smarts it takes to dairy farm
into the future to be outstanding in your field on The Dairy Exporter Podcast hosted
by Editor &Deputy Editor of Dairy Exporter, Sheryl Haitana & Anne Lee and her
fellow journalists.

Get in touch with our Editor of Dairy Exporter on email
sheryl@countrywidemedia.co.nz if you have a great insight to share with our
thousands of readers and listeners in New Zealand and around the world.


Don’t miss our weekly episodes of The Dairy Exporter Podcast by hitting the
subscribe button now and join our Dairy Exporter weekly email newsletter to get the
latest in-depth stories in your mailbox so you are always ahead of the game in the
business of dairy farming into the future.

Visit the website to subscribe: www.dairyexporter.co.nz

It’s been your mainstay in dairy farming since 1925 as your trusted source of adding value to your dairy business, now it’s time for the Dairy Exporters’s seasonal stories to exclusive weekly interviews to come straight to your ears with this brand-spanking new podcast.
 It’s here you can seek out the guidance, inspiration and smarts it takes to dairy farm into the future to be outstanding in your field on The Dairy Exporter Podcast hosted by Editor &amp;Deputy Editor of Dairy Exporter, Sheryl Haitana &amp; Anne Lee and her fellow journalists. Get in touch with our Editor of Dairy Exporter on email sheryl@countrywidemedia.co.nz if you have a great insight to share with our thousands of readers and listeners in New Zealand and around the world.
 Don’t miss our weekly episodes of The Dairy Exporter Podcast by hitting the subscribe button now and <a href="https://dairyexporter.co.nz/sign-up/">join our Dairy Exporter weekly email newsletter</a> to get the latest in-depth stories in your mailbox so you are always ahead of the game in the business of dairy farming into the future.
Visit the website to subscribe: <a href="http://www.dairyexporter.co.nz">www.dairyexporter.co.nz</a>

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