Bread-and-Butter might have been synonymous with simplicity in the past, but no longer. Many food and consumer producers found the “end of elasticity” in the recent commodity run-up and are now looking for risk management practices outside of pass-through pricing. For companies traditionally viewing hedging as a taboo, managing increasing volatile price risk has become a unique challenge.Our professionals have assisted agricultural, consumer product, and manufacturing clients adapt risk management practices from energy and capital market firms. More importantly, they have been able to modify those practices to suit client needs which tend to be very unique from industry to industry. Eco+Risk is ready to help your company:
- Educate stakeholders to help drive consensus on risk management goals – including boards, co-op members, senior management, and investors
- Identify and vet new OTC counterparties to reduce reliance on large market-makers
- Develop hedging strategies which balance investor and customer needs with pass-through abilities and capital constraints
- Determine proxy hedges for illiquid products and monitor the residual basis risk
- Select commodity risk management systems which cover pricing nuances in your industry
- Manage hedge effectiveness, derivative accounting reporting, and documentation needs