Producers familiar with Livestock Gross Margin for Dairy (LGM-Dairy) will see improvements to the policy beginning July 1. Starting that Thursday, LGM-Dairy will be available weekly.

Producers familiar with Livestock Gross Margin for Dairy (LGM-Dairy) will see improvements to the policy beginning July 1. Starting that Thursday, LGM-Dairy will be available weekly. The increase in the number of sales days will allow producers to build coverage levels with more data points.

Feed costs are higher, and labor costs will be trending higher. The good news is interest rates are still low. The biggest positive factor is that milk prices have been moving higher.

Dairy Revenue Protection (Dairy-RP) premiums have been influenced by recent Chicago Mercantile Exchange (CME) price action and option volatility. There are two major components for determining premiums: 1. Relative price: Are prices high or low? 2. Volatility: Are prices calm and in narrow ranges or are they more volatile?

As the crop insurance industry starts to process third-quarter 2020 Dairy Revenue Protection (Dairy-RP) claims, it is evident some producers who purchased coverage on Class IV milk may receive a payout. Timing was important, and early adopters received better payouts.

Dairy Revenue Protection (Dairy-RP) and Livestock Gross Margin for Dairy (LGM-Dairy) are the two insurance-based risk management products available to dairy producers.

A discussion of risk management tools for dairy producers usually starts with how to manage milk price risk. There are also tools to use to reduce the price risk for feeder or fat cattle you sell from your dairy operation.

Last week’s derecho (high winds) in the Midwest was a stark reminder of how Mother Nature is in charge. This was one of the big events that changes how a year of farming turns out, especially if you are in the center of it. There are so many pictures of flat corn and snapped corn, plus lots of ruined grain bins. Some of this event will be covered by crop insurance, wind insurance and property/casualty insurance. It still is a big deal.

The dog days of summer are here, but that doesn’t mean you should let attention to dairy risk management stagnate. Failure to protect some currently strong margins or revenue could come back to bite you later.