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Winning the Game - The Dairy Edition A Simulation Game For Dairy Price Risk Management

Margaretha Rudstrom

Summary

Winning the Game – The Dairy Edition is a milk price risk management education program. Its hands-on approach teaches price risk management concepts to dairy producers with the goal of smoothing out the bumps in their milk checks.

The concepts and information related to milk marketing can often be overwhelming to many dairy producers. This innovative program was developed to take a simple yet realistic hands-on approach to introducing price risk management concepts to dairy producers.

Participants in the program are able to test their marketing skills by making 18 milk-pricing decisions over an eight month time-frame using actual market conditions and prices. In other words, participants implement a 12-month milk marketing plan. Participants receive the results of their pricing decisions over the simulation year in the game plus seven years of historical data in which their gross returns are calculated. In addition, producers can compare their pricing decisions and results over the seven years to “Celebrity Players” who employ specific milk pricing strategies based on their individual risk tolerances and price targets.

After playing the game, producer are presented with information and data on price variability and risk, milk price seasonality, developing price targets, and exploration of forward pricing tools for milk are presented giving producers the background needed to make more informed price risk management decisions.

The workshop provides dairy producers with the knowledge and no-risk real life experience gained in the simulation game to begin using price risk management tools with more confidence.

Details

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