FreshAgenda Methodology

FreshAgenda Methodology /

FreshAgenda Methodology

Projected Balance Sheets ↓

Value Series ↓

Projected Fundamental Values ↓

Measures ↓

Projected Balance Sheets

The FreshAgenda platform provides a continuous rolling short-term outlook for the global dairy market.

The DTS is built on a platform of historical supply chain data in balance sheet format that reconciles milk production and dairy product production and use for the 12 major dairy producing exporters – EU-27, US, UK, New Zealand, Australia, Argentina, Belarus, Uruguay, Brazil, Ukraine, Turkey, Canada, and India.

The short-term projections in the DTS are based on assumptions affecting the balance sheets of each major exporting producer, in terms of:

Milk production growth
Product mix – the use of milk in major product groups
Domestic consumption – affecting the volumes of product available to trade
Exports based on shares of import demand from external markets.

This analysis is updated monthly as new historical data (and revisions) becomes available and as fresh intel informs the forward assumptions.

Value Series

The platform derives Projected Fundamental Values (PFVs) as a proxy for monthly forward price projections. PFVs are developed for each of a number of highly visible, long-running spot price series that dairy market participants are most familiar with.

These are sourced from:

United States: CME spot quotes; USDA weekly dairy market news reported prices; and USDA NDPSR
EU-27: EU Commission weekly observed prices and major country wholesale market quotes
New Zealand: NZX weekly spot quotes and Dairy Australia monthly spot prices.

Daily or weekly spot price quotes are averaged into monthly observations in our workings.

Projected fundamental values (PFVs)

We derive monthly PFVs using econometric multiple regressions.

Separate forward projection equations are developed from regression analyses for each of the product value series across the major exporting regions (as above) based on historically available information for relevant supply and demand factors (independent variables) sourced from publicly-available data sources and own estimates.

In each of these cases, we identify independent variables that provide correlations that explain close to or better than 90% of historical price movements over a statistically valid period.

Historical data and forward assumptions are revised monthly. We also review each regression monthly to ensure the relationships remain significant and properly reflect the market reality. Where necessary, we revise the projection formulae and variables if influences have altered due to the impact of any supply and demand factors.

The DTS is constructed such that changes in assumptions affecting supply and demand projections will also alter the PFVs, ensuring a dynamic analysis of the potential risk or opportunity.

Measures

We have developed a number of measures in the analysis that aid to the interpretation of the effects of change over time.

Milk solids equivalent (MSE) is used to represent overall volumes of demand (including global exports) and supply, based on butterfat and protein typically used in dairy products according to common specification.

Market tension has been derived from estimated movements in historical and projected stocks of commodity milk powders in the hands of major exporters and is expressed as an index (the Market Tension Index or MTI). MTI movements are the inverse of trends in the estimated commodity powders (SMP and WMP) stocks. The higher the index, the greater the tension and shorter the supply of milk. When stocks are high, the tension index is low. The rationale for this is that the level of any surplus or shortage in milk availability will show up in changes in volumes of powder stocks.

CRM

Centralize and Standardize Communication With Customers

Communication and consistency are key when providing optimal customer service. Finally, you can maintain a solid-performing CRM while maintaining one customer database. CMS offers a fully integrated CRM to capture all activity around sale and purchase opportunities.

Centralizes all communication with customers

Integrates with your ERP

Captures and documents all activity around sale and purchase opportunities

Accounting

Tools and Financial Reports Designed for the Specific Needs of the Grain Industry

Grain businesses require unique tools to manage the accounting complexities of the industry. CMS’ Accounting module provides every tool necessary to handle everything from accounts receivable to the general ledger. Instantly generate financial reports explicitly customized for a grain business.

Provides various grain-specific accounting tools

Generates financial reports often required of grain businesses

Converts to several currency options

Logistics

Easily Manage Product Movements

From inbound to outbound movements, managing the logistics of processing and trading commodities is a monumental task. CMS’ Logistics provides a user-friendly interface to efficiently manage the inbound or outbound multimodal movement of products or bulk commodities.

Manages accrued expenses to each logistics line

Creates multiple displays for multiple task types

Access ship to/from company inventory or direct ship

Contracting

Control Purchase and Sale Contracts

Your agribusiness’ success depends greatly on closely monitoring your purchase and sales contracts. With real-time position reporting, CMS’ Contracting module provides full management capabilities for purchases and sale contracts sourced either off-farm or from a trading partner.

Provides real-time position reporting

Gives management capability of purchases and sale contracts

Tracks contracts sourced off-farm or a trading partner

Order Entry

Handle Client Orders with Ease

When your agribusiness involves various products ranging from feed additives to fertilizer, carefully handling orders is critical to successful business operation. CMS’ Order Entry module provides an efficient and robust method of taking orders from your clients. The solution is designed to handle the unique needs of feed additives, finished and premix feed, seed, chemical, and fertilizer sales.

Provides an efficient method for taking orders

Handles various products

Manages critical information required to fill orders

Export Documentation

Automatically Creates Shipping Documents

Take the guesswork out of creating necessary documents for exporting products. With CMS’ Export Documentation module, documents necessary for shipping products internationally are automatically created. The module is tightly integrated with our Logistics module for a winning combination.

Creates documents automatically

Tracks product movements

Manages documentation required for exports

Inventory Management

Efficiently Track Inventory Location, Costing Methods, and Selling Prices

Knowing every detail of your inventory is key when operating an agribusiness. Gain tracking capabilities, including costing methods and selling prices on a product and location level with multi-currency/multi-unit of measure with CMS’ Inventory Management module. The module also offers nested formula capabilities and bin tracking features.

Traceability and lot control

Tracks inventory location, costing methods, and selling prices

Offers multi-currency or multi-unit of measure applications

Provides nested formula capabilities