I have worked in two very different procurement organizations over my career. Different sizes, different cultures, different brands, different approaches to almost everything. But they shared something fundamental in common: neither one truly valued the financial impact of commodity risk management.

That is not a complaint. It is an observation about a structural problem in how most companies think about the people managing their largest financial exposures.

Org One: The Lean Machine

The first organization managed roughly $6 billion in food and packaging spend. The entire procurement team was sixteen people, including leadership. Sixteen people covering five brands across every category of food and packaging inputs.

Do the math. That is $375 million in spend per employee. And that is the average — the actual distribution was far more skewed, with commodity-facing roles carrying significantly more.

Every buyer was putting out fires, every day. There was no slack in the system. No bench depth. When someone was out, their categories did not get covered — they just waited. The CEO had mandated that the team spend ninety percent of its time on strategic activities while simultaneously reducing headcount. The tension between those two objectives was constant and unresolvable.

In that environment, I was personally managing between $600 million and $900 million in commodity exposure. Markets that move every day. Decisions that carry consequences measured in millions. One person.

Org Two: The Well-Staffed Operation

The second organization was different in almost every way. Roughly $7 billion in spend, but for a single brand. The team ranged from twenty-five to thirty-two people depending on the year. Staffing was not a constraint. The opportunity to be strategic — to actually think, plan, analyze, and optimize — felt luxurious after the lean machine.

The spend per employee worked out to about $250 million. Still substantial, but a different world from the first organization. There was time to build frameworks, test hypotheses, and develop real risk management strategies rather than just reacting to whatever was on fire that morning.

Even in this more comfortable environment, though, my personal commodity exposure exceeded $1 billion. One person. Over a billion dollars in market-moving positions. Every single day.

The Math That Should Keep Executives Up at Night

Here is what I want leadership teams to sit with for a moment.

Commodity inputs represent fifteen to thirty percent of total cost for many food products. For some items, that number exceeds seventy percent. These are not small line items buried in overhead — they are the dominant cost driver for the entire business.

And in most organizations, one person is responsible for managing that exposure. Sometimes two. Rarely more than a handful.

Think about what that means. A single individual, making daily decisions in volatile markets, managing hundreds of millions or billions of dollars in financial exposure. Markets that react to weather, geopolitics, trade policy, logistics disruptions, and a hundred other variables that cannot be predicted or controlled.

The scale of responsibility is staggering. And yet, in many organizations, the commodity risk management role is treated as just another sourcing position. Same title structure, same compensation bands, same career trajectory as someone negotiating packaging contracts or managing office supply spend.

The Disconnect

Everyone notices when commodity markets spike. When wheat prices jump thirty percent in a week, or soybean oil doubles in six months, the CFO calls. The CEO calls. Board members ask questions. Suddenly, commodity risk management is the most important function in the company.

But the recognition of the people managing that exposure consistently falls short. The $375 million sourcing lead and the $900 million commodity risk manager sit in the same department, attend the same reviews, and often occupy the same level on the org chart. But the scale of their financial impact is dramatically different.

It is not that sourcing is unimportant — it is critical work. But the nature of commodity risk management is fundamentally different. Sourcing is about negotiating the best terms for a defined need. Commodity risk management is about navigating financial markets in real time, making probabilistic decisions under uncertainty, and managing exposures that can swing by millions in a single day.

Those are different skill sets. They require different experience. They carry different levels of financial consequence. And they should be valued differently.

The Question Nobody Asks

Here is the question I think every leadership team should be asking: are you paying your commodity risk manager enough?

Not enough to retain them — although that matters too. Enough to attract the caliber of talent that the role actually demands. Enough to signal that the organization understands what is at stake. Enough to reflect the reality that this person’s decisions will impact the P&L more than almost anyone else in the building.

When you have one person managing $600 million, $900 million, or over $1 billion in daily commodity exposure, the most important hedge you can put in place might not be a financial instrument. It might be investing in the human capital responsible for all the others.

The market does not care about your org chart. It does not care about your compensation bands or your title hierarchy. It moves every day, and the person you have sitting in front of those screens, making those calls, carrying that weight — that person’s judgment, experience, and skill are either your greatest asset or your greatest vulnerability.

Pay accordingly.