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Navigating Dairy Risk Management Decisions

Jerzy Jaromczyk

Summary

The continued economic stress faced by U.S. dairies, and the passing of the current Farm Bill, has lead to recent changes and developments in the USDA programs designed to help those in the industry. Though this suite of dairy risk management products affords producers flexibility, it can also make devising a sound risk management strategy confusing. Furthermore, evidence of a lack of Margin Protection Program participation on the part of farmers who would benefit, characterizes the educational challenge at hand. This presentation will summarize the features and expected performance of various USDA dairy risk management tools, including the relatively new Dairy Revenue Protection insurance offered by the USDA – Risk Management Agency, the Farm Service Agency’s recently revamped Dairy Margin Coverage (formerly Margin Protection Program), and the Risk Management Agency’s long standing Livestock Gross Margin insurance. The costs and benefits of program participation will be presented along with an overview of the various considerations that producers should keep in mind throughout the dairy risk management strategy decision-making process. Experiences of educating New York producers to address their misconceptions and help them understand how these programs would perform for their farm will be discussed to provide the audience with ideas on how they can effectively communicate dairy program changes and guide the producers they serve.

Details

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