Dairy Producers Protect Profits
Managing risk in the current market environment is critical. A recent MILK Intelligence survey found 56% of the 43 producers surveyed participate in the Dairy Margin Protection Program. With $4.50 the highest coverage level reported, none of the farmers included have received a payment this year. Roughly 19% of all producers surveyed participate in LGM-Dairy.
More than half of the farmers do not use risk management tools beyond the MPP program. Only 24% of producers hedge more than 75% of their milk. “We have developed our own hedging decision tool and use a computational method to determine when we should put on a hedge,” says dairy producer Don Ponter. “All hedges include milk, soy and corn components.”