Latest / The Buyer's Side with Fexingo: Procurement, Sourcing, and B2B Purchasing Decisions
How a Buyer Used Price Index Clauses to Stabilize Commodity Costs
Episode 93 of The Buyer's Side: Lucas and Luna explore how procurement teams use price index clauses to manage volatile commodity costs. They walk through a specific case: a mid-size food manufacturer that locked in a pricing formula tied to the USDA's dairy price index, saving 11 percent over spot-market rates during a six-month milk price surge. The hosts break down the mechanics — how the clause is structured, what index to pick, how to negotiate the spread above index — and discuss pitfalls like index lag and supplier pushback. Luna challenges whether this shifts risk unfairly…
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