Federated Farmers has developed a new Forage Trading Agreement with Rural Contractors New Zealand that has a sliding price template.
They have contracted the New Zealand Stock Exchange (NZX) to develop and regularly update fuel and fertiliser cost reference indices.
Arable chairman Colin Hurst said the industry groups were working together to safeguard members in the face of price volatility.
"It gives growers and harvesters/purchasers an agile contract that can cater for spikes in the cost and help ensure no-one is unfairly out of pocket."
He said Covid-19 and disruption to supply chains, leading to "roller-coaster" prices for fuel and fertiliser had sparked the problem, which had not been an issue in the past.
This was followed by the "curve ball" of impacts from the Russia-Ukraine war that saw further sharp fuel increases, he said.
Farmers and contractors can access this data through their organisation’s websites, and select the variable costs they want to move, at a particular rate.
Mr Hurst said the data did not tell either party how to price, as everyone had their own cost and pricing models.
He said the template was a guide to assist farmers and contractors to calculate price changes, either up or down, he said.
"We are not telling people what to charge, we are just giving farmers and contractors the tools to determine how things could be priced. When you get these huge shifts in volatile prices it’s not about winners or losers, it’s about us all having a fair outcome."
He said so far the reaction had been positive and they would like further feedback to ensure the data was suitable for all forage crops and to cater for other costs.
"We think this is a valuable tool for the sector, one that offers a bit more certainty in these uncertain times."
