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Dairy Trading, Powders and Proteins Trading
Imperium Commodity Search has a rich experience in recruitment/headhunting for dairy participants globally, across trading, brokering, logistics, producers, manufacturing and nutrition firms. We maintain a portfolio of both clients and candidates across the space globally and are well positioned to offer an agile, consultative approach to firms and individuals alike.
We have a solid understanding of the dairy markets and can advise on career options as well as strategic hires globally.
What is Dairy?
Dairy is a lesser mentioned commodity market, but a very global one. The term dairy is known to everybody, including all products made from or derived from milk, primarily from cows or goats. Dairy Commodities on the other hand include specifically Class III and Class IV Milk, Milk Powders, Non-Fat Dry Milk, Butter and Whey. The CME (Chicago Mercantile Exchange) offer futures and options contracts on these products to varying contract sizes.
Class III Milk
Class III Milk refers to milk used in the making of hard cheeses; primarily Cheddar and represents the largest area of milk utilisation
Class IV Milk
Class IV Milk refers to milk used in the production of butter, dairy spreads and dry products including milk powders, NFDM (non-fat dry milk)
Milk Powders / Skimmed Milk Powder is essentially dried milk, produced through a process of evaporation of the water content, leaving dried milk powder. Primarily used in nutrition for the production of baby milk powders, food manufacturing and protein/sports drinks
In dairy commodities, butter refers to the base level of butter produced from the churning of milk/cream to producer a fatty substance. This is then further refined with additives and additional ingredients to produce end user products.
Dry Whey is a by-product of the cheese and milk production process. Commonly used for human and animal nutrition
Almost 900 Million tonnes of milk are produced annually and this continues to grow as advancements in collection processes reach more markets, and the demand for dairy products increases from LEDC’s and emerging markets.
The dairy market as a whole is a tale of two worlds. One is dominated by global nutrition and food firms with a large portion of the market. The other is the home of hundreds of small-mid sized dairy traders, producers and manufacturers competing in an illiquid market.
The top 5 dairy players in 2018 were Nestle (Switzerland), Lactalis (France), Danone (France), Fonterra (New Zealand) and Frieslandcampina (Netherlands) who account for almost 200 million USD in annual revenues.
How is Dairy traded?
Dairy products are traded in both their physical form, and by proprietary traders, hedgers and market makers through Futures and Options contracts on the CME, NYZ and EEX. The bulk of the back to back dairy trading market is positioned in Europe and dominated by small-mid sized dairy trading firms, often with a specific product focus or area of specialism.
Physical Back to Back traders are responsible for managing relationships with farms, producers and manufacturers globally and can be positioned at numerous stages of the value chain. Often the remit of a dairy trader will involve building and managing relationships with suppliers whilst building and managing a portfolio of end users/customers across the food industry and to a lesser extent the animal feed markets. The Netherlands is home to the majority of back to back dairy trading firms in Europe, with others positioned in Germany, Switzerland, France, Ireland and the UK.
Manufacturers maintain relationships in a similar way to grain participants through agreed contracts with affiliations and co-operatives such as Arla (Denmark), Dairygold (Ireland) and Land’O’Lakes (US) who maintain relationships with local dairy farmers for set price purchase of milk products.
Niche Product Specialists operate within specific dairy verticals to accommodate specific applications of dairy products, such as infant nutrition, niche food lines and additives. These firms will often maintain relationships with specific suppliers and carve out their own retail business through proprietary brands, or sell their products into food producers.
Futures play an important role in the global dairy markets as the products are susceptible to price risk throughout the production chain, changing hands numerous times through to the end user. Many traders, purchasers, producers and manufacturers utilise futures to hedge against price risk, either through an internal risk management team or via a dairy broker specialising in risk management for the dairy industry, such as INTL FCStone (USA). Futures within dairy are also traded by proprietary traders and hedge funds.
Where is Dairy traded?
Dairy is a globally traded commodity and has grown largely in emerging markets over the past decade. Asia has become an attractive growth market whilst Europe and the US have long led the concentration of dairy firms for many decades.
The largest dairy exporters in the world are Germany, Netherlands, France and New Zealand. These 4 countries accounted for almost 30 bn USD worth of dairy exported in 2018.
Who are the clients?
Most dairy products end up in the human food manufacturing industry, going into producers of cheese, milks, creams, yoghurts and nutrition goods. Traders will sell containerised product into processing or manufacturing plants to be turned into end product; maintaining relationships at food producers for the sale of product into the production process. Some dairy products/offtake is used in the animal nutrition industry, linking into livestock growth/production.
What is the Salary for a dairy trader?
Dairy traders are usually paid a base salary and a performance related bonus for total revenues/PnL for a yearly period. Salary grows substantially with experience and client base with senior traders earning upwards of 100-150,000EUR per annum.
Salaries for junior traders generally start at around 35-40,000EUR with the expectation of traders to build out into markets/clients. Annual performance bonuses vary largely between companies and regions and can run from 10%-100% of base in some regions.
Imperium Commodity Search – Specialist Headhunter to the Dairy, Powders and Protein markets
Imperium Commodity Search and it’s consultants have experience in sourcing for staff across front and middle office positions within the dairy markets globally. Our consultants have successfully completed the placement of global sourcing managers, risk management brokers and futures traders across the US, Europe and Asia with experience on headhunting/extracting hard to find and passive talent. Mark Taylor has successfully worked within the dairy space for over 4 years across front and middle office positions with trading houses, producers and brokers across Europe, the US and Asia.
If you are interested in finding out how we can assist you in finding your next opportunity in the global dairy, proteins or powders space, or are growing your trading team and looking to identify/source top talent, then please call us now on +44 (0) 203 927 5090 or register online here and one of our Commodity Consultants will contact you ASAP.
To view our current dairy products trading, operations and support vacancies click here or contact one of our consultants to discuss current careers / jobs in dairy trading and to discuss your needs in more detail.
To arrange a consultation with a consultant to discuss your hiring needs / growth plans and where we can assist click here or contact one of our consultants directly here for a confidential discussion
Roles in Dairy
- Back to Back Dairy Traders
- Dairy Sourcing
- Dairy Broker
- Dairy Risk Management
- Dairy Futures/Options
- Market Makers
- Product Specialists
- Sales/Business Development
- Trade Finance
- Legal Counsel
These are just a few examples of dairy jobs and positions we recruit for; other positions are available.
To see our latest vacancies, please click here