When the Dairy industry gathered in Singapore for the 2025 SGX-NZX Global Dairy Seminar, the discussion focused on how the industry can manage risk in a market constantly shaped by price volatility.
Lucian Gladstone, Head of EMEA Dairy Derivatives Sales at Marex Hedging Solutions, joined Stu Davison from HighGround Dairy, Vincent Almering from Interfood Global B.V., and moderator Huang Chunlin from the SGX Group to explore that very question during the “Risk Management Panel: Dairy Market Outlook and Hedging Trends”.
From Deficit to Oversupply
The discussion opened with a look at how global supply dynamics are reshaping the market. After a long period of high prices, production across New Zealand, Europe, and the US has surged – turning deficit into oversupply. Butter prices in Europe and the US have weakened sharply, while New Zealand butter has remained slightly more resilient, supported by steady demand from China and South-East Asia.
Lucian noted that while futures markets are already signalling lower milk prices, these shifts are yet to be fully reflected at the farm gate, particularly in Europe. The panel agreed that this disconnect highlights the importance of better tools and understanding for managing price exposure across the supply chain.
Education and Adoption
Despite dairy being one of Europe’s highest-value agricultural commodities, the volume of hedging in terms of multiples of derivatives to physical remains modest – leaving plenty of room for further growth and market development. Part of that stems from the diversity of the sector – the breadth of Europe’s dairy regions and the production of many specialty dairy products means physical dairy doesn’t always align neatly with standardised commodity contracts.
But the market is evolving. Greater education, easier access to markets, and the availability of new tools like options are helping more producers and processors explore structured hedging.
“With greater education and smarter use of hedging tools, the dairy industry can move from reacting to prices to managing them,” Lucian said.
From left to right: Huang Chunlin (SGX Group), Lucian Gladstone (Marex Hedging Solutions), and Stu Davison (HighGround Dairy)
Taking the First Steps
When it comes to starting a price-risk management strategy, the panel’s advice was clear: start small and build gradually.
Lucian suggested beginning by identifying contracts that can be index-linked, creating a simple, transparent foundation for managing exposure.
“Understand what you want to achieve and which risks you’re mitigating,” he said. “Even starting with one product helps you build confidence and integrate risk management into your operations.” 
From left to right: Lucian Gladstone (Marex Hedging Solutions) and Stu Davison (HighGround Dairy)
Continuing the Conversation
Following the panel discussion, Lucian, George Morris, Nigel Brunel and Connor Rogers from the Marex Dairy Derivatives Sales teams in London and Auckland, hosted a client reception in Singapore. The evening brought together dairy professionals, traders, and partners from across the industry – an opportunity to exchange perspectives, strengthen relationships, and build on the discussions from earlier in the day.
Looking Ahead
As market conditions evolve, the ability to manage volatility is becoming ever more central to success in the dairy industry. Through better education, collaboration, and smart use of hedging tools, businesses are finding new ways to protect value and plan with confidence.
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