Milk Price Protection for New Zealand Dairy Farmers

Your Milk. Your Price.
Your Decision.

Farm owners and Sharemilkers can now access Milk Price Protection directly. Secure a minimum price for your milk solids, keep the upside if prices rise, and make the call yourself.

Talk to an Expert

A dairy farmer checking his phone in a paddock, herd grazing behind him

In a first for New Zealand, Sharemilkers and farm owners can now independently take full control of their milk price risk management decisions.

Sharemilkers using Milk Price Protection, available through Figured, will now be able to access StoneX’s milk price hedging solutions and independently make decisions about their milk price risk management strategy.

Sharemilkers are more exposed when the milk price moves

A sharemilker's income is largely tied directly to the milk price, without the added income diversification that land ownership provides. At the same time, they carry a greater cost burden regardless of where the payout lands.

That exposure can be compounded by:

Higher operating leverage, with feed, wages, animal health and herd costs that don’t always fall when milk price does.
Debt serviced from milk income, often secured against the herd rather than land.
Less of an equity buffer, without land ownership providing the same balance-sheet flexibility through a lower-price season.
Higher gearing, particularly for sharemilkers using sharemilking as a pathway towards farm ownership.

The result is fewer buffers between a falling milk price and the cash flow and equity they’ve worked to build.

A dairy farmer and his adviser talking in a paddock, the herd grazing around them

Sharemilkers lacked decision-making independence. Until now.

Despite carrying significant exposure to milk price movements, sharemilkers have historically had limited access to hedging solutions in their own right.

Milk Price Protection changes that. Sharemilkers can access StoneX’s milk price hedging solutions and independently make decisions about their milk price risk management strategy.

That means you can make decisions based on your share of milk income, your costs, your financial position and the level of risk you’re comfortable carrying — rather than having your ability to manage milk price risk determined by the farm owner’s strategy.

A dairy farmer and his adviser talking at the edge of a Southland paddock at sunset

What all dairy farmers can now achieve with Milk Price Protection & Figured

Model the Impact of Changing Prices

Understand how price shifts affect your farm's breakevens directly within Figured.

Secure a Minimum Price

Protect your income from market drops while still benefiting from rising prices.

Plan with Confidence

Improve cash flow certainty to support financial planning, on-farm decisions, and debt repayments.

Chart comparing the opening milk price forecast with the final farmgate milk price across recent seasons

Price Prediction vs Price Protection

Trying to predict where the milk price will land isn’t a risk management strategy.

Opening forecasts give farmers a view of where the season might be heading. But as history shows, the final milk price can land well above or below where it started.

Milk Price Protection gives you another option: limit losses if the price falls and still receive price increases, rather than relying on predicting the market.

A Decision to Protect Their Business

Hear directly from Neer Enterprises and their adviser at Sidekick Rural about how and why they chose to take the step to protect their milk income.

Why Choose Milk Price Protection?

Protect your milk income if prices fall. Get the higher price if they rise.

Simple and Accessible

Designed specifically for dairy farmers, not financial traders. This solution helps you understand your risk and gives you the tools to protect your milk income in a clear, uncomplicated way.

Clear & Transparent

Kind of like insurance, you’ll pay a clear, one-off premium with no surprises. Lending options are also available to cover the premium to help manage your cash flow.

Flexible Protection

Protect as much or as little of your milk income as you like. If market prices rise, you can take advantage of the gains, while still having peace of mind that your minimum price is secured.

Figured's Milk Price Calculator

See the Impact of Income Protection for Your Farm on Figured

If you have a Figured subscription, Sign In to your account to try the Milk Price Calculator, else Book a Call with us and we’ll walk you through it.

Use our Milk Price Calculator to:

Explore potential savings and costs.
Compare market scenarios and price protection benefits.
Plan your strategy with clarity.

Figured's Milk Price Calculator modelling protected and unprotected milk price scenarios for a dairy farm

Backed by Industry Experts

Powered by StoneX, a global leader in agricultural risk management, providing reliable support and expertise to help you protect your income with confidence.

An End-to-End Solution

How it Works

Use the Calculator: Log in to Figured and calculate what Milk Price Protection could look like for your farm, including estimated premiums.
Speak with Your Adviser: Discuss your strategy and confirm the milk solids you'd like to protect. Have an active Figured Farm Manager subscription.
Create an Account: Sign up for a StoneX account through Figured and complete the onboarding application to unlock Milk Price Protection.
Lock in Your Prices: Secure a minimum price for your milk solids and start protecting your farm’s milk income.

The Figured Advantage

Milk Price Protection is fully integrated into Figured, allowing for better decision-making in the context of a farm’s broader financial strategy.

Model the impact of Milk Price Protection on break-evens directly in Figured. Understand how different price levels affect cash flow, profitability, and financial resilience.

Farmers can seamlessly access Milk Price Protection within Figured.

Farmers don’t have to navigate this alone. Figured provides structured support through a trusted network of advisers who understand farm financial planning.

Lending solutions are available to help cover the upfront cost of securing a minimum milk price, ensuring farms can protect their income without impacting immediate cash flow.

Book a 15 Min Call

Get Answers

Frequently Asked Questions

01What are my options for managing milk price volatility?

Farmers have three common tools to manage price risk: Fixed Price, Futures, and Put Options. Here’s how they compare:

Fixed Price Agreements (Fonterra)

How it works: Between March and December, Fonterra allows you to lock in a set price for your milk solids in advance. This price is based on the market at the time of offering, and you can apply to fix a portion of your supply.

How am I paid: This price is paid following the standard advance schedule with any wash up, if necessary, made following the final farmgate price.

Pros: Fixed price agreements are simple and provide certainty. Your income, for the approved milk solids, is guaranteed at the agreed price, regardless of how the market moves.

Cons: You don’t get to choose the price, it’s set by Fonterra. There’s also a 10-cent service fee per kgMS, and you won’t benefit if market prices rise above the fixed price.

Futures Contracts

How it works: A futures contract is an agreement to lock in a price for your milk solids at a future date. This can be done at any point in time before, or during a season. You pay a deposit upfront (called the initial margin) to secure the contract. You may also be charged a brokerage or transaction fee at the start, and end of the contract.

How am I paid: Being a financial product, you will continue to get paid directly by your milk processor, usually at an advanced rate, with the settlement price at season end reflecting the market price. However as the market price changes ahead of settlement, you will either pay, or receive the difference between your contracted price, and the new market price (this is called variation margin). Variation margin is assessed daily. At settlement, the amount paid from your processor (market price) plus the balance of variation margin will reflect your contracted price.

Pros: Futures allow you to fix your milk price for a given season, while offering more flexibility than normal fixed price agreements. Future contracts are usually the most cost-effective risk management product in terms of service / brokerage fees.

Cons: Futures fix your milk price for the given season, meaning if the market rises above the level at which you sold futures, you will not benefit from the higher prices. You may also have to deposit margin payments to maintain your position. These payments can cause pressure on cash flow throughout the season, especially if the market rises. During the season, your advance payment rate (what you are physically paid each month), may not be sufficient to cover the difference between your contracted price, and the market price. Most farmers will use a ring-fenced overdraft from their bank to alleviate this cost pressure.

Put Options (Milk Price Protection with StoneX Trading)

How it works: A milk price option is an agreement between you and StoneX, where you can purchase the right to receive a minimum milk price, while still retaining the right to benefit if the market price stays above, or improves above that agreed price. This product is not an insurance product. Although the upfront premium may appear similar to an insurance premium, Milk Price Protection is a derivative and has different risks, costs, and features.

How am I paid: This is a financial product, similar to futures contracts, in which you will be paid directly by your milk processor as per normal. At the agreed settlement date (aligned to season end when the final farmgate price is announced), if the final settlement price is below your agreed minimum price with StoneX, StoneX will pay you the difference for the amount of milk solids hedged. If the final settlement price is higher than your agreed minimum price, you are not required to exercise that option, allowing you to retain the higher milk price.

Pros: Put options offer downside protection with upside flexibility. You’re not tied to a fixed price, and there are no unexpected cash payments during the season. While you must pay a non-refundable upfront premium, the price is fixed with no unexpected extra costs. The upfront premium may be tax deductible but individual circumstances will vary so we recommend you seek tax advice from your accountant. Settlement payments are made at the end of the season, if necessary.

Cons: The upfront premium cost is higher than other products available, and this is non-refundable, even if market prices don’t drop.

Which option is best for me?

The appropriate choice depends on your objectives, financial situation, needs, risk tolerance, and cash flow position. Fixed Price Agreements, Futures Contracts and Put Options have different risks and features. This information is general only and should not be taken as a recommendation that any product is suitable for you. You should ensure you fully understand the risks involved and seek independent financial, legal and tax advice where appropriate.

02How much does Milk Price Protection cost?

You’ll pay a one-off premium upfront, based on the amount of milk solids you protect and the price you lock in. The cost depends on:

Market conditions.
Your production volume you would like to protect
The minimum price you choose to secure.

Lending options are also available to help cover the premium if needed.

03How can I access Milk Price Protection?

You can set up an account with StoneX Trading, although Figured acts as a referrer to StoneX and supports with a seamless onboarding process, regardless if you use Figured’s financial management software for your farm or not.

For Figured users, there is a specific calculator developed in the platform that allows dairy farmers to model, and assess different scenarios based on real time prices, and their own farm’s financials to fully understand the impact that this product can have on their business, and the potential risk averted, enabling informed decisions. There is also a simplified, and embedded onboarding process helping you get access to these products faster, because we know the market can move quickly.

For non-Figured users, you can register your details directly through our website and someone from the team will connect with you to support you in setting up an account with StoneX.

The calculator is intended to support education and scenario analysis only. It does not take into account all of your circumstances and should not be relied on as financial advice or as a recommendation to enter into any transaction.

04How do I qualify for this service?

StoneX Trading holds a retail derivatives issuer licence for this product, meaning you can access this product, once you have an active account with StoneX.

Standard AML/KYC processes apply and StoneX will complete a risk assessment as part of the final onboarding process to ensure this product is an acceptable fit.

Most other risk management products available in the New Zealand market are only available to those who qualify as a Wholesale Investor, or are the farm owner who has the supply contract with the processor.

05How do I benefit if prices go up?

Milk Price Protection gives you the flexibility to take advantage of higher market prices. You’ll still receive your full payout from your Milk Supplier.

If the payout is higher than the price you secured, you won’t receive any additional payments from StoneX. The upfront premium is non-refundable, even where no settlement payment is made.

If the payout is lower than your secured price, StoneX will pay you the difference.

06When do I get paid if the market drops?

The final Farmgate Milk Price is announced around September, after the season ends. If the final price is lower than your secured price, StoneX will pay you the difference at settlement.

07Who is StoneX?

StoneX is incorporated in Australia and holds an Australian financial services licence, and is a licenced derivatives issuer in New Zealand. StoneX provides both retail and institutional clients with access to a broad range of local and international financial markets, by offering services across foreign exchange, commodities, equities, derivatives and global payments.

StoneX is part of the StoneX Group, a global brokerage and financial services firm. The StoneX Group is a global operator transacting with customers around the world through its internet and mobile trading platforms.