Milk Price Guarantee Certificate

Product information

Your situation

  • You produce milk, for which you receive a variable milk price that can be subject to monthly changes
  • You want to fix the variable milk price for a longer period, either for the entire expected future production or a part of the expected future production

Description of the product

The Milkprice-Guaranteecertificate is an agreement between two parties to offset the differences in milk price between an indexed, variable milk price (for example guarantee price Friesland Campina) and a fixed milk price, during a specific period. This way, the variable milk price can be fixed. During the period of the Milkprice-Guaranteecertificate, the variable milk price will be re-established every month. The balance of the fixed and variable milk price of the month will be settled monthly.

Example of Certificate of Raw Material

You produce milk and receive a variable milk price for this. However, as a result of this you are exposed to risk once the price of milk decreases. This risk can be avoided by fixing the milk price for a longer period of time. This goal can be reached by signing a Milkprice-guaranteecertificate, allowing you to receive a fixed milk price through settlement.

Payment flows

{How does DTO cover his risk}
Dairy farmers can sign in on the volume of milk in advance. The variable milk price  will be settled with the other party, the dairy farmers. Both parties are mutually risk bearing. DTO functions as intermediary.

advantages Milkpriceguaranteecertificate

The Milkprice-Guaranteecertificate offers much flexibility in handling milk price risks. By means of a Certificate of Raw Materials, the risk of increasing prices can be covered.

Main characterestics

The main characteristics of the Certificate of Raw Material can be found below
  • The Milkprice-Guaranteecertificate is  a financial instrument
  • Variable milk prices can be fixed through the Milkpriceguaranteecertificate
  • Duration of the certificate is dependent on demand and supply
  • The commencement date is dependent on demand and supply
  • The variable milk price is based on the guarantee price of Friesland Campina, Belgomilk or DMK. If desired differently, the feasibility of this will be investigated
  • Price differences between the variable milk price will be settled monthly in the month after delivery
  • The Milkprice-Guaranteecertificate is traded on the private market



The costs of the Milkprice-Guaranteecertificate are dependent on the volume and maturity of the certificate. The settlements costs are, independent of the volume, €250,- 
The certificate Costs are: € 25,- for each contract of 50.000 liter
The administration costs are: € 0.15,- per 100 kg milk. 
The balance of the prices to be settled will be deposited to your account, or cashed through automatic collection every month.
Example for buying 8 Milkprice-Guaranteecertificates of 50.000 liter = 400.000l for one year.
Settlements costs: € 250,-
Certificate costs: € 25/Certificate (8x25 = € 200,-)
Administration costs: € 0,15,- / 100 kg milk (8 certificate x 50.000 kg x 1 year / 100 kg Milk x € 0,15 = € 600,-
Total costs are: € 250,- + € 200,- + € 600,- = € 1050,-
The balance of the discounted price is automatically deducted 1 time per month.


The buyer cannot prematurely terminate a Milkprice-guaranteecertificate without further notice. A Milkprice-guaranteecertificate can only be terminated in case    DTO can find a buyer prepared to take over the contract.
The Milkprice-guaranteecertificate is an OTC (over the counter) transaction. An OTC transaction is an agreement between two parties which is not established on a regulated exchange market and in which one or both participants’ performances are dependent on the price fluctuations of an underlying value. Although OTC transactions are usually concluded by parties active in the production or processing of milk, there is no direct link between the two of them. In case of premature termination or interim modification of the underlying value/production, the rights and/or obligations which can be derived from the milkprice-guaranteecertificate will remain in effect. In case the actual development of the milk price deviates from your expectations, there is a risk that –with hindsight-   the choice for a different strategy would have been a better solution. The moment the transaction is concluded you can, based on the agreed upon variables, determine the risk of the transaction. Thereby, you accept that risk. The agreed volume in the contract will solely be used for calculation of the milk prices. Merely the balance of the two milk prices will be communicated. The buyer cannot prematurely end a Milkprice-guaranteecertificate without further notice. The Certificate of Raw Materials can only be terminated in case DTO can find a buyer prepared to take over the contract.

For further information

DTO B.V. Penning 4 8305 BH Emmeloord ✆ 0527-630505
Trienke elshof 
✆ 06-10437600 
This email address is being protected from spambots. You need JavaScript enabled to view it.
DTO B.V. General Conditions of Purchase
Confirmation: a hard copy or electronic document sent by DTO to the Hedge Party stating the essential details of each individual Transaction;
Hedge Party: the party or parties concluding an RMC Agreement with DTO;
Customer Transaction: the Transaction that DTO concludes with its customer forming the basis of the Transaction with the Hedge Party;
RMC Agreement: the Raw Materials Certificate Agreement concluded between DTO and the Hedge Party;
Agreement: the Agreement concluded via the RMC Agreement, the Transactions and the Confirmations;
Transaction: any Transaction concluded at any time between the parties to which the RMC Agreement is declared applicable in the Confirmation or otherwise;
Transaction Date: the day on which the Transaction is concluded;
Fixed Price: price agreed between DTO and the Hedge Party, which cannot be changed for a certain period;
Variable Price: the price set monthly by the agreed party and which can be changed by the latter at any time;
Due Date: any date stated in the RMC Agreement or Confirmation on which the Hedge Party is to fulfil obligations under the respective Transaction.
2.Scope of Action
2.1.These General Conditions shall apply to all current and future legal relations between DTO and the Hedge Party unless departed from in the Agreement.
2.2.If the Hedge Party declares other General Conditions to be applicable, these shall not apply in legal relations with DTO unless the latter has agreed these.
2.3.If one or more conditions of these General Conditions shall be fully or partially invalid or invalidated at any time, the other provisions of these General Conditions shall remain fully in force. The parties shall then be obliged as far as possible to rectify this situation in accordance with the invalid or invalidated condition.
2.4.DTO is shall be entitled to unilaterally change the General Conditions. DTO shall then send a copy of the amended conditions to the Hedge Party for inspection.
3.Transactions and Confirmations
3.1.The Hedge Party shall be obliged to check the Confirmation for accuracy. The Confirmation that the Hedge Party has legally signed for agreement or the Confirmation that the Hedge Party considers as approved shall be deemed the only and exclusive evidence of the Transaction and the conditions under which the Transaction is entered into.
3.2.The Confirmation shall in any case include the essential details of the Transaction such as the Transaction Date, the date of entry into effect, the Due Date(s) and the applicable prices.
3.3.The Hedge Party hereby gives its approval for the Confirmation to be forwarded electronically.
4.Payments and costs
4.1.Payment of all debts owed by the Hedge Party to DTO shall take place by transfer into an account to be provided by and within a payment deadline stated by DTO. The confirmation of the eTransaction shall form the basis for calculating the total price of the Transaction.
4.2.DTO shall pay all its debts to the Hedge Party by transfer into an account to be provided by the Hedge Party.
4.3.All payments to DTO shall be carried out at no charge to DTO and without any offsetting, deduction, withholding or suspension unless agreed otherwise.
4.4.The Hedge Party shall bear all costs relating to the normal carrying out of the Agreement and all costs incurred by DTO and flowing from the fact that the Hedge Party fails to comply, comply on time or comply fully with any obligation under the Agreement including those relating to legal aid, experts, collections and costs of proceedings and the Hedge Party shall pay these to DTO on first request from DTO.
5.1.The Hedge Party shall release DTO from any third party claims relating to the Agreement.
5.2.DTO shall not be liable for (the consequences of) incorrect or incomplete information provided by the Hedge Party.
6.Power of attorney and representation
DTO may provide a third party with a power of attorney to act on behalf of DTO. The authorized representative shall not be entitled to pass this power of attorney onto a third party.
DTO may at any time offset all its debts whether or not payable or conditionally by the Hedge Party with counterclaims that the Hedge Party may have against DTO.
8.Immediate exigibility
If the Hedge Party is in default in fulfilling any obligation towards DTO, DTO may, as far as necessary, foreclose immediately on its demand against the Hedge Party by termination.  
This shall only not be the case if the insignificant default sum does not justify termination. Termination shall be notified in writing stating the reasons. 
9.Interim termination of the Transaction and/or Agreement
DTO shall be entitled at any time to terminate the Transaction and/or the Agreement in the meantime if the Customer Transaction is also terminated in the meantime. 
10.Force majeure
DTO shall not be obliged to fulfil any obligation at the expense of DTO towards the Hedge Party if DTO is hindered from doing so due to circumstances not based on guilt or under the law, a legal action or a currently held view.

Milk prices


Global Dairy Trade

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What is a Milk Price Guarantee Certificate (MPGC)?

The Milk Price Guarantee Certificate offers you the possibility of receiving a fixed milk price for a certain period. An Milkpriceguaranteecertificate will be valid for 50,000 kg of milk. You can decide yourself what quantity of your milk quota you wish to cover with the MPGC. 

What is the reference price?

This is the standard representive price thats published and recognizable in the environment. It depends on which country or region the release is done.

To whom do I deliver my milk?

You continue to deliver your milk to your current customer. The certificate is separate from your milk flow. 

How does the cash flow work?

Settlement takes place monthly based on the reference price. If the reference price is lower than the price agreement of the certificate, you will receive the difference immediately. If the reference price is higher than the price agreement of the certificate, you will be required to pay the difference. 

What are the costs?

The fixed entry amount, irrespective of the number of certificates will be EUR 250.00. Administrative costs of EUR 0.15 per 100 kg of milk will also be charged. 
Example of five certificates running for more than one year: 
  • Entry amount: EUR 250.00 
  • Administrative costs: EUR 375.00 (5 certificates x 50,000 kg x 1 yr)/100 kg milk x EUR 0.15 = EUR 375.00).
  • Costs per certificate: EUR 25.00 

What are the risks?

The greatest risk is the failure by one of the parties to fulfil its payment obligations. Customers are required to provide sufficient guarantees in order to cover this risk. 
DTO takes no risks regarding the prices by passing these on to a professional third party. 

Are an unlimited number of certificates placed?

No, the placing of certificates depends on the number of certificates and therefore the volume of milk that the customers wish to set. DTO will mail the price level of the certificate to the dairy farmers who have stated that they wish to be kept informed. The dairy farmer can then register subject to the principles “first come, first served” and “full = full”. 

Can I be kept up-to-date without obligation?

Of course. All communications on the introduction of the certificates proceed via e-mail. When placing a certificate, all dairy farmers who have registered on the site will be kept up-to-date completely free of obligation. The initiative for registering a certificate or not (and with what volume) rests with the dairy farmer. 
Register now! (hyperlink naar inschrijfformulier)
DTO in principle has no opinion on the dairy market nor is any advice given on whether or not to purchase certificates. 
For further information 

The DTO Milkpriceguaranteecertificate is since 2010 available for Dairy Farmers and Milkprocessors. The goal of the DTO milkpriceguaranteecertificate is to manage the price volatility in the dairy market for the buyers and sellers of dairy.

After the end of the quotation in 2015 there is an increase of price volatility, the uncertainty of the marges will increase. Risk management will be still more important in the future.

To get more influence on price volatility, DTO developed the milkpriceguaranteecertificate. The DTO milkpriceguaranteecertificate creates to fix the milkprice for a certain period. Its a possibility to fix the marges ahead.

DTO is active in the Netherlands, Germany and Belgium.

The milkpriceguaranteecertificate is a financial product. There is no physical delivery of milk. It's an agreement between 2 parties that for a certain period settle the differences between a variable milkprice and a indexed fixed price. The variable price is a representative price thats published and a representative for the environment. The price differences will be settled monthly. DTO is the intermediate between the two parties.



Ecopark 75b, 8305 BJ Emmeloord 

T.   0031 (0)527-630500

About DTO

DTO milkpriceguaranteecertificate is a part of Farmel BV