Australian Dairy Farmers (ADF) has long-advocated for a trading platform that brings transparency to milk prices, increases competition for farmgate milk and enables dairy farmers to lock in prices with processors up to three years forward for some of their milk.
This platform is the Australian Milk Price Initiative (AMPI).
The AMPI ran its first spot market for milk, covering the three dairy regions of Victoria in March 2022. The trading was done on the Mercari platform, owned and operated by the Financial and Energy Exchange.
These spot markets deliver the transparency to milk prices necessary to enable a forward financial hedging market like those seen in New Zealand, the US and Europe.
ADF worked closely with government and industry to develop the AMPI and encourages dairy farmers to take advantage of the trading platform. Similar trading platforms are operating for other agricultural sectors, including wool and grains.
Not only does the AMPI empower dairy farmers when they sell milk, it will also increase transparency and build trust. There is no more transparent price signal than an open market price.
The AMPI will improve risk management across the supply chain with back-to-back pricing from customer to processor to farmer, providing the ability to lock in margins across the chain. Better margin and risk management enables better planning, which, in turn, drives investment and growth across the dairy supply chain. More investment means a strong dairy industry.
The spot milk market is available at 2.00-2.30pm (Sydney time) on two Thursdays of each month. Information and access to the market can be found at:Â https://riemann.com.au/products/
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