6 tactics to manage commodity price fluctuations

Canadian food and beverage manufacturers face a complex landscape when understanding and navigating commodity prices. Manufacturers can make more informed purchasing decisions and better manage their input costs by grasping the key factors that influence these prices and utilizing available tools.

Commodity input costs vary significantly between different types of food and beverage processors. It’s a function of their products and the required raw materials. For example, smaller dairy processors can spend nearly 60% of their revenues on raw milk, while bakeries can face fluctuations in ingredient prices.

Here are some crucial factors that influence agricultural commodity prices:

With these influences in mind, here are six tactics Canadian food and beverage manufacturers can use to make informed purchasing decisions:

By understanding these key factors and utilizing available tools and information, Canadian food and beverage manufacturers can better anticipate price trends and make more strategic purchasing decisions. This approach can help mitigate the impact of price volatility on operations and potentially improve profit margins in an increasingly challenging economic environment.

Article by: Alan Archibald