European Dairy Futures and Options help businesses manage the impact of changing dairy prices.
Whether you produce, buy, process, sell or trade dairy products, fluctuations in butter and skimmed milk powder (SMP) prices can affect costs, revenues and profit margins. Euronext Dairy Derivatives provide a transparent, regulated way to manage price risk and support better business decisions.
Launching in October 2026, these exchange-traded contracts are listed on Euronext Paris (MATIF) and are designed to support participants across the European dairy value chain.
At a glance
- Manage exposure to dairy price fluctuations
- Improve budgeting and financial planning
- Protect profit margins
- Access transparent market pricing
- Trade on a regulated European exchange
- Benefit from central clearing and standardised contracts
"Dairy prices can change rapidly. European Dairy Futures and Options provide businesses with tools to manage exposure to dairy price movements using transparent market-based pricing and standardised contracts."
European Dairy Derivatives are exchange-traded futures and options contracts based on two key European dairy products:
- European Butter (82% fat)
- Food-grade Skimmed Milk Powder (SMP)
The contracts are traded in euros on the Euronext Paris Commodity Derivatives Market (MATIF).
They are designed to help market participants:
- Hedge dairy price risk
- Manage commercial exposure
- Improve forecasting and planning
- Gain exposure to dairy market price movements
For businesses new to derivatives, these contracts offer a transparent and regulated alternative to managing dairy price risk.
A dairy futures contract allows market participants to lock in a future dairy price today.
For example:
- A food manufacturer concerned about rising butter prices can buy Butter Futures to lock in today's price for future physical purchasing needs.
- A dairy producer concerned about falling dairy prices can sell Futures to secure the value of tomorrow's physical dairy sales and help protect future revenues
Because Euronext dairy futures are cash settled, there is no physical delivery of butter or skimmed milk powder.
At expiry, positions are settled financially against the Vesper Price Index.
Buying a dairy option provides protection against adverse price movements while allowing market participants to benefit from favourable market moves.
For example:
- A food manufacturer concerned about rising butter prices can buy a Call Option, giving it the right to buy Butter Futures at a predetermined price if the market rises.
- A dairy producer concerned about falling dairy prices can buy a Put Option, giving it the right to sell Butter or SMP Futures at a predetermined price if the market falls.
Unlike a futures contract, an option gives the holder the right, but not the obligation, to exercise the contract before expiry. Exercising an option creates an open position in the underlying futures contract.
Vesper Price Index (VPI)
The regulated pricing reference behind Euronext Dairy Derivatives.
The contracts settle against the Vesper Price Index (VPI), administered by Compass Financial Technologies, now part of MSCI.
The VPI provides an independent and transparent pricing reference for European dairy markets, helping market participants access a consistent and trusted dairy price benchmark.
Learn more about the Vesper Price Index
European Dairy Derivatives are designed for:
- Dairy producers
Manage exposure to changing dairy selling prices. - Dairy processors
Help stabilise purchasing costs and improve margin management. - Food manufacturers
Reduce exposure to dairy input cost volatility. - Dairy traders
Access regulated dairy markets and price discovery. - Financial institutions and investors
Gain exposure to European dairy market price movements.
FAQ
Dairy futures are exchange-traded contracts that allow market participants to buy or sell a specified quantity of a dairy product at a predetermined price for delivery or settlement at a future date. They are commonly used by producers, processors, traders and food manufacturers to manage exposure to price fluctuations in dairy markets.
Dairy options are financial contracts that give the buyer the right, but not the obligation, to buy or sell a dairy futures contract at a predetermined price before or on a specific date. Options can help market participants manage risk while retaining the opportunity to benefit from favourable market movements.
The Vesper Price Index is a benchmark that reflects pricing information for key dairy commodities. It is widely used by market participants as a reference for pricing, risk management and settlement of certain dairy derivative contracts. By providing transparent market data, the index helps support informed trading and hedging decisions.
Euronext offers derivatives on key European dairy products: Butter and Skimmed Milk Powder (SMP).
At expiry, futures contracts are settled financially against the final settlement price. The final settlement price is determined from the relevant Vesper Price Index. The final settlement price is calculated as the average of all the published values of the weekly Vesper Price Index during the expiry month. No physical delivery takes place.
Trading takes place through authorised Trading Members that provide access to Euronext markets.
See "How can I start trading Euronext dairy derivatives?" for a list of trading members.
Contact your broker or a Euronext member firm to obtain market access and learn more about the available contracts. The following members confirmed their ability to provide access to Euronext Dairy Derivatives:
- ABN AMRO CLEARING BANK
- ADM INVESTOR SERVICES INTERNATIONAL
- BNP PARIBAS
- CACEIS BANK
- CITIGROUP GLOBAL MARKETS EUROPE AG
- DNB Bank ASA
- GOLDMAN SACHS BANK EUROPE SE
- HSBC CONTINENTAL EUROPE
- JP MORGAN SE
- MACQUARIE BANK EUROPE DAC
- MAREX SA
- STONEX FINANCIAL EUROPE GMBH
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