UFPC's best-in-class strategies monitor risk and protect member costs
From the ingredients used in a new sauce, to the resins used in cups and cutlery, commodities form the backbone of UFPC® purchasing. Volatility in world markets, a challenging economy, energy legislation and other economic issues have made commodity markets complex. As a result, today’s buyers must not only build strong relationships with suppliers and work within market principles, but strategically execute solutions based on their understanding of the many complex issues affecting all items purchased. UFPC’s commodity risk management team watches the markets and serves as a vital link of strategic information between our five national purchasing co-op boards and UFPC's purchasing teams.
The commodity risk management team has four specific functions:
- Create and execute strategic planning and positions on key commodity items
- Assess and monitor market risk in margin management for store operators
- Use risk management tools to smooth price volatility
- Centralize key purchasing and commodity information for teams in Louisville, Ky., Irvine, Calif., Ft Lauderdale, Fla. and Plano, Texas
By proactively monitoring raw-material costs from the farm to the store, UFPC’s commodity risk management team acts as a resource to assist UFPC buyers in evaluating market conditions. With the commodities team acting as a central point of contact, purchasing teams may share relevant strategies and information across many product categories.
UFPC-Managed Commodities
| Beef |
Poultry |
| Dairy |
Produce |
| Packaging |
Oil/Shortening |
| Pork |
Wheat and Grains |
Commodity Resources
UFPC’s commodity risk management team publishes monthly commodity information via a Commodity Update newsletter, and the secure commodity information located on member-only web pages. The dairy purchasing team, located in Plano, Texas, produces The Cheese Wire, a publication covering the dairy market. Members may log in with their username and password to view this monthly commodity information. Both publications provide relevant information on key commodity areas.
As markets remain volatile, UFPC is focused on using risk management tools to help smooth or eliminate volatility. With the commodity risk management team in place, UFPC can help to ensure favorable pricing for concept co-op members. |