Kerry Group unveils ‘Forward Price Scheme’

Kerry Group has unveiled a new price volatility measure for its suppliers in the form of the Kerry Agribusiness Forward Price Scheme.

In this new scheme, Kerry suppliers will be given the option to “tie down” a portion of their milk production to a fixed-price 12-month contract – from July 2018 through to June 2019.

While the “Forward Price Scheme” contract price to be offered is yet to be confirmed, the indicative price currently stands at 33c/L including VAT for supplies – with solids of 3.3% protein and 3.6% butter fat.

The scheme will be available for 23 hours for suppliers to apply for online from next Tuesday, June 12, at 3:00pm through to Wednesday June 13 at 2:00pm, when the window will close.

On June 12, interested farmers will be given the option to secure between 1% and 10% of their annual milk volume into the Forward Price Scheme.

Kerry Agribusiness will strive to cater for all interested farmers at their preferred percentages, a company spokesperson confirmed.

Milk supplied must be in accordance with the Kerry Agribusiness supply curve from March to October, according to the processor.

“Futures Contracts” will allow Kerry Agribusiness to offer forward price schemes on a more regular basis to the processor’s milk suppliers. Therefore through the use of this scheme, such regular offers will mean that milk suppliers should be in a better position to mitigate milk price volatility, according to the spokesperson.

Suppliers will only be able to apply for the scheme online during the 23-hour window open next week. Interested farmers are advised to ensure that they can access online facilities during this time-frame.