Crunch time for dairy contracts
Stakes are high for 25,000 Glanbia suppliers as they decide whether new forward price deals on offer are worth taking up
Published 25/01/2011 | 05:00
It's crunch time for 25,000 Glanbia suppliers who are eligible for the first ever forward price contracts to be offered to Irish dairy farmers.
Who should sign up?
Could these new contracts be the way of the future for dairy farmers?
Darragh McCullough got the views of Nuffield scholar Tadhg Buckley who has just completed a study which answered these questions.
What are forward-price dairy contracts?
These are agreements between a farmer and processor for the supply of a fixed amount of milk over a fixed period of time for a fixed price.
The processor is able to do this on the back of agreements with its customers or by selling future milk supplies on 'futures markets'.
To date, these futures markets have only existed in the USA, through an organisation called the Chicago Mercantile Exchange (CME).