date:Sep 05, 2012
Price volatility is huge within dairy commodities, such as butter, skimmed milk powder (SMP) and cheese. But the sector makes little use of hedging as a means of managing costs, John Lancaster, an analyst with FCStone Commodity Risk Management told delegates at the Dairy UK conference yesterday (September 3).
Its not about predicting highs and lows in the market price, said Lancaster:Its all about locking in your margin and finding equal and opposite risk to create certainty.
But there is litt