Dairy producers across the country are wondering (and worrying) about how much lower milk prices can go amidst such high feed costs. While old crop feed prices are very high and milk prices have dropped considerably, opportunities still exist despite the risk management hurdle.
Focusing on three key areas can help producers move forward with their 2023 risk management.
1. Don’t ignore the fact that commodity prices have a long history of overshooting and undershooting production costs.
2. Don’t’ be distracted by nearby prices and margins.
3. Do stay consistent with your risk management plan and forward opportunities.
Perhaps one of the best tools to capture these tips is Dairy Revenue Protection (DRP) insurance. DRP provides a minimum price and revenue guarantee while leaving the upside open and with less premium cost. But every producer must determine their risk tolerance and goals for a risk management plan that fits their operation.
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