Over the last two years the farm revenue from milk sales has declined by nearly $20 billion from the record high milk prices experienced in 2014. To help protect against revenue declines farmers may use public or private risk management tools. These tools include Chicago Mercantile Exchange futures and options contracts, forward contracting with milk handlers, USDA’s Margin Protection Program (MPP), and USDA’s Livestock Gross Margin (LGM) Insurance for Dairy Cattle. The MPP and LGM programs offer protection on the difference between a milk price and a feed ration consisting of corn, soybean meal, and for MPP, alfalfa hay.
The following questions were created to assess farmer use of dairy risk management tools and interest in the development of a new dairy insurance product. Survey results will remain completely confidential and will be aggregated to provide market feasibility information to USDA’s Federal Crop Insurance Corporation.