Expanded Price Risk Management Opportunities Workshop
Our first pre-conference workshop, led by the DFA Risk Management team, provided members insight to the price risk management programs available to them to capture better margins and review current and future market conditions and trends.
President of DFA Risk Management Ed Gallagher moderated the workshop and gave a brief overview of the agenda and programs to be discussed. Topics included Dairy Revenue Protection (Dairy-RP), Dairy Margin Coverage (DMC) — formerly known as Margin Protection Program for Dairy — DFA forward contracting programs and a panel discussion.
After Ed provided an overview of changes and improvements with the markets and opportunities to capture better margins in the second half of the year, he introduced Director of DFA Risk Management Christine Brodeur. Christine provided details about Dairy-RP, steps to sign up and coverage levels, as well as resources available. She explained that the program is a milk price hedge — a minimum price that is paid on the covered milk you produce. The premium cost of the minimum price is highly subsidized by U.S. Department of Agriculture’s Federal Crop Insurance Corporation.
The workshop’s next topic was presented by DFA Risk Management Analyst Jake Vuilleman. He discussed DMC, and compared differences and similarities to the former MPP-Dairy, including the new margin level of $9.50 and the enrollment timeline. Sign-ups should begin for this new program mid-June and producers who also use the Livestock Gross Margin, Dairy-RP and DFA’s forward contracting programs should also be eligible for enrollment.
“One of the really nice things about this program,” Jake said, “is that no matter if you’re milking 300 cows or 3,000 cows, this program can provide some benefit to you.”
The last session was covered by Senior Manager of DFA Risk Management Morgan Rehberg. Morgan provided an overview of forward contracts and how they complement the other available programs. She also discussed estimated blend prices by region and the flexibility these customizable programs offer.
“You have more options than ever to combine these programs,” Morgan said. “And we’re dedicated to making you aware of all the opportunities available to you.”
Some of the points Morgan emphasized were that DFA Risk Management forward contracts can support consistent profitability and allow you to lock into favorable prices. For second-half 2019, Morgan said, members can lock into prices about the same or better than they received in 2017 and significantly better than 2018.
All the panelists explained that more information is available on the DFA Risk Management website, dfariskmanagement.com, and encouraged members to call them with questions.