Mitigate volatility in the wheat market
Risk management resources for the wheat market available to customers through Ardent Mills' Performance Pricing program.
The future is often surprisingly different than what we expect. Wheat buyers at food manufacturers manage this uncertainty every day. For instance, over the course of last few year, flour prices have varied from $12.00 to $45.00 per cwt. Market fluctuations like this can impact the bottom line at food companies and can leave business objectives unmet due to unplanned expenses.
Volatile conditions can happen in any market. Russia experienced an extreme drought in 2010 and banned grain exports starting on August 15, 2010. Compounding that issue were further weather challenges in the U.S., Australia and Canada. Outside influences like trade policies, global GDP growth, and political instability can contribute to erratic markets. Designed with today’s flour market in mind, Ardent Mills offers Performance Pricing: a program which allows you to enroll a percentage of your futures requirements in a program actively managed by some of the world’s leading commodity experts. The objective of this program is to provide pricing that beats the market average over the course of time and improves long-term pricing strategies.
Performance Pricing is a flexible and affordable solution designed to benefit any size organization. Our analysts combine their commodity risk management experience with Cargill’s global network of data, people and resources to deliver competitive prices for the wheat component of your purchases over the course of time. Our primary goal is to help you build a diversified approach to managing the wheat component of your flour price.
Enrolling a portion of your flour needs in the program gives you:
The opportunity to diversify your marketing strategies with an industry leader The competitive advantage of globally based market data points and the ability to benchmark your component pricing results against the performance of an industry leader The peace of mind that comes with a reliable way to closely track the current market volatility, allowing you to focus on the rest of your business When you enroll in the Performance Pricing program, you retain control over the pricing of your flour requirements other than the wheat component for the portion of your purchases enrolled in the program. Enrollment is limited to a range of between 10 and 40 percent of your estimated, upcoming Ardent Mills flour purchases. This means that you are still responsible for establishing the wheat component of your other flour purchases, along with your premium and mill feed components.
Performance Pricing also includes:
A weekly statement detailing your current wheat futures price andthe percent hedged of enrolled futures The week’s marketing strategies and insight into our market bias Information related to weather conditions, world economies, global supply and demand, and other factors that impact market direction and volatility In addition, on a weekly basis, you have the freedom to lock in the price of the wheat component of your flour price at the weighted average of the enrollment in the program and the current market price. Ardent Mills' stated goal is to beat the market average so your company can realize the best wheat component pricing for the period. In truth, no one can beat the market every day, but with Ardent Mills as your partner, you get insight that comes from our experience and resources with the objective of beating the market average over time. "The information presented herein is believed to be true and accurate. However, all statements are made and all information is provided without guarantee, express or implied, on our part. WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE and FREEDOM FROM INFRINGEMENT and disclaim all liability in connection with the use of the products or information contained herein. All such risks are assumed by the purchaser/user. The information contained herein is subject to change without notice. This information is offered solely for your consideration, investigation and verification."