The launch of the Australian Milk Price Initiative (AMPI) has been hailed as a “breakthrough in milk price transparency and buyer competition” with regional milk spot markets delivering forward hedging as seen in other commodity markets. AMPI enables dairy farmers and processors to lock in prices up to three years forward for some of their milk with various bids across the three Victorian regions made with prices exceeding $9kgMS for the spot market. Individual months in the new season traded above $8kgMS.
In a statement, Australian Dairy Farmers (ADF) president Rick Gladigau said AMPI will improve risk management across the supply chain, providing back-to-back pricing from customer to processor to farmer, with the ability to lock in margins across the chain. With better margins and risk management, better planning is possible which will drive investment and growth across the supply chain.
AMPI is part of a 2019 federal election pledge of $560,000 to develop a milk trading platform as part of ADF’s commitment to deliver new measures to increase transparency and help manage market risk.