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Stable, a technology-based commodity price risk management solutions provider, today announced the first-ever organic soybean meal hedge. The transaction will be settled against the Fastmarkets organic soybean meal Midwest US price.
The organic soybean meal Midwest US price has recorded a 29% decline over the past six months, after climbing 110% in the previous 18 months, Fastmarkets price reporting data shows. Such volatility drives the need for agrifood businesses to better manage their risk, as prices rise and fall, and Fastmarkets is ideally situated to provide independent, benchmark prices to help the industry address those challenges.
The unique combination of Stable’s price risk management tools and Fastmarkets’ organic and non-GMO indices will allow producers and consumers of organic grains and oilseeds to reduce the range of possible outcomes in the event of sudden price swings.
“This marks the first time in history that price protection was made possible in organic soybean meal, an unlisted agricultural commodity for which there was previously no way to effectively manage price risk. The mix of growing demand and heightened volatility in organic markets underscores the need for the type of risk management that Stable, with the support from strategic partners including Fastmarkets, is delivering to our customers,” said Joe Brooker, VP Partnerships & Research at Stable.
Because organic grains are not traded on any public exchange, price risk management solutions available to businesses with exposure to these products have been limited. That has changed with Stable’s simple and targeted options-based risk management solutions that settle directly against reference prices published by Fastmarkets.
“Dependable organic soybean meal price data offered by Fastmarkets is the bedrock for groundbreaking risk solutions. During this period of unparalleled volatility, our goal is to provide the pertinent information needed to help market participants make robust risk management decisions,” said Tim Worledge, Editorial Director, Agriculture at Fastmarkets.
Organic soybean meal options are among several contracts offered by third-party financial entities to help manage price risk for organic crops. For more information about hedging price risk, please contact Stable. For information on Fastmarkets’ organic grain price indices, visit Fastmarkets’ website.
Stable offers a safe harbor for businesses exposed to volatile prices. Stable does this by hosting hundreds of third-party indices that are local or tightly correlated to the physical risks its clients face. From financial controllers to farmers, Stable has democratized hedging for businesses of every size and sector to create the financial stability they need to invest in the future with confidence.