Project Overview
Dairy farming is a very risky business. For example, since 1995 the average Class III (BFP, before 2000) milk price has been $12.55/cwt. But during this time the difference ($12.01/cwt) between the minimum ($8.57/cwt, Nov 2000) and maximum ($20.58/cwt, May 2004) has been almost as large as the average. In this price climate it is critical for Michigan dairy producers to learn how to control input/output price risk to protect their $3.2 billion investment in farm assets. Our proposed project has two simple and straightforward goals: 1) To get producers already using price risk management tools to integrate them in a quantitative way into a quantitative business plan so they can quantitatively measure the effects of marketing decisions on their business performance, and 2) To get producers not using price risk management tools to begin using them. We subscribe to the beliefs of experts like Dr. David Kohl who, at a recent Michigan dairy conference, stated the following concerning the future of agricultural commodity prices and their effects on farm business performance: "the peaks will be higher and the valleys will be lower." Producers unprepared to operate in this environment will not survive. This project is designed to help producers maximize the benefits risk management tools offer and maximize the chance for their dairy farm business to survive.
Number of Participants: 122
PROMOTIONAL MATERIALS
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EDUCATIONAL MATERIALS
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REPORTS & EVALUATIONS
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