Milk producers should consider risk hedging

Dr Chris van Dijk, MPO chief executive officer, told the MPO North congress that milk producers should consider the option of risk hedging by means of futures contracts on the JSE. The MPO is at present conducting discussions with the JSE in this regard.

The industry is at present in a serious cost squeeze with increases of between 200% and 300% in feed cost without a concomitant increase in producer prices. He also said that another option for risk hedging is to fix feed prices in advance, as some milk producers are already doing.

Van Dijk stressed that a strategic plan that includes planning for difficult times such as droughts was cardinally important. He encouraged farmers to give attention to what they could control on their farms and to join study groups so that they could compare themselves with the rest of the group. Landbou.com. To read more about this, click HERE.