The agricultural fertilizer industry is experiencing some of the most significant changes in its history. Manufacture consolidations, transportation difficulties, historically high raw materials costs, and an increasing volatile international market are all influencing the domestic market place as never before.
This recent uncertainty and high volatility in the fertilizer industry has exposed risks that previously have been ignored or largely overlooked. Participants throughout the supply chain- manufacturers, wholesalers, retailers, distributors, importer/exporters -are all exposed to the risks FCStone’s Fertilizer Group have identified, track, and seeks to mitigate.
FCStone’s Fertilizer Group can assist your company with sale and procurement strategies, commodity price risk management for manufacturing input, production cost (including natural gas), weather risk management, logistical transportation solutions, managing transportation costs and foreign exchange solutions. Contact one of our risk management consultants today.
Using extensive research and historical data, FCStone’s Fertilizer Group can assist companies hedging gross processing margins. Using a specific ratio of natural gas and fertilizer financial instruments, a company may be able to systematically protect margins for a particular production period.
Commodity risk management entails lowering the risk associated with the price of commodities a company uses. Adverse commodity price fluctuations damage bottom line results, however using commodity risk management strategies can mitigate much of this risk.
Though relatively new to the fertilizer industry, commodity risk management is FCStone’s forte. The FCStone Fertilizer Group continues to be an integral and willing participant in the educational process of risk management solutions within the industry. Contact a risk management consultant for more information on how your company can benefit from FCStone’s expertise.
FCStone’s Fertilizer Group has the capacity to offer many different risk management solutions across a variety of products using exchange traded futures, over-the-counter (OTC) products, or a combination of both in the following markets:
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Fertilizer
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Energy
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Weather
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Fuel
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Forex
Companies not having the ability to hedge to minimize the risk of price fluctuation have to build a capital reserve or build a cushion in their pricing structure that would absorb adverse price changes.
Those companies utilizing a risk management program are able to protect against a price decline which in turn enables them to continue manufacturing product or building inventories in anticipation of cash sales. Similarly, they are able to protect against rising prices which will enable them to make forward sales on product that has not been purchased.
FCStone has developed a unique approach to management of risk within a company or department. Our keystone product is the Integrated Risk Management Program (IRMP).
This program, when implemented, will allow customers to use state of the art risk management services to manage risks a client company is exposed to in a variety of markets including fertilizer, energy, weather, fuel, and Forex. The program is personalized to include relevant data for the client company.
FCStone will work with the client company to develop and implement the IRMP. The IRMP process is illustrated below:
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Training of company personnel is critical to successful implementation of the IRMP program. FCStone works with the company to integrate and train personnel at all stages in the process.
