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The role for derivatives in the Australian dairy industry

Role for derivatives in the Australian dairy industry

The Australian dairy industry is currently experiencing significant turmoil, with farmgate milk price volatility wreaking havoc on the financial stability of farmers. But what can be done to stop the continual spiral?

Brendan Rynne

Partner, Chief Economist

KPMG Australia


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Regardless of industry, price volatility creates risk. For long-term assets like dairy farms, not knowing how financial performance is likely to fluctuate each year makes it near impossible to plan properly and make strategic decisions.

Dairy farmers are struggling to maintain viable businesses, and as a result are reaching out to government to intervene and help solve the industry’s problems.

In this KPMG Economics Research Note, Trading places…the role for derivatives in the Australian dairy industry, we examine some of the core issues that are creating this shaky environment, and identify approaches that could help the dairy industry recover and prosper.

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