Dairy producers have not been left out of the price and supply-chain storms that have been the last two years. As pandemic-driven lockdowns and Ukraine-based market uncertainty continues, the bottom line of every dairy has been hit with increases or scarcer access to feed, energy and transportation. However, milk prices have also risen with input costs even though Russia and Ukraine do not directly affect global milk supplies. Because global dairy producers have been cutting back on production due to high feed and operating costs, the war has pushed prices higher, even as far as pushing milk prices to record highs.
Dairy producers are encouraged to prioritize risk management by keeping things simple. Approved in all 50 states, Dairy Revenue Protection (DRP) is a viable, flexible risk management tool producers can leverage in this unique environment of market volatility. Among the many benefits of DRP, coverage:
>> Secures guaranteed revenue while leaving the potential upside open
>> Has no margin calls or ongoing financing requirements
>> Addresses coverage gaps in existing products
>> Offers federal subsidies through USDA
Coverage levels through 2022 allow producers to lock in minimum prices not realized since 2014. Dairy producers should take advantage of this rare opportunity and are encouraged to contact their trusted ProAg agent or reach out to our team for more information.
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