Increased volatility in exports, which is creating price instability, signals that U.S. dairy farmers are operating in a global market more now than ever before, according to Matt Gould, analyst with Dairy Food and Market Analyst Inc.

There is a lot of volatility in the marketplace right now, according to Chuck Nicholson, who spoke on the cyclical nature of the dairy marketplace at the 2015 Dairy Financial and Risk Management Conference, hosted by the Center for Dairy Excellence.

Every five years, dairy producers and others in agriculture brace themselves for the latest farm bill, which is a bundle of legislation Congress passes to set national policies for agriculture, forestry and nutrition programs carried out by the government. The Dairy Price Support Program, Federal Milk Marketing Orders and the Milk Income Loss Contract program were all enacted through farm bill legislation.

Government policy provided strong support for milk prices with no price tag for producers until consumers began to question the program’s cost a decade ago. We are well aware of the price volatility since 2000. Very few of today’s taxpayers and policymakers would support a return to a government-funded dairy price support program, so how can producers manage these volatile markets? A written marketing plan should create a strategy that delivers milk price stability and cash flow security with a discipline that reduces the emotion of marketing decisions.