The University of Wisconsin is hosting a webinar Thursday, December 3rd to talk to dairy farmers about the Dairy Margin Coverage program. Mark Stephenson with the University of Wisconsin Dairy Center for Profitability said dairy farmers need to realize that dairy markets have risk. “It’s risk management, it’s not trying to out guess what the markets are going to do,” Stephenson went on to say, “if a pandemic isn’t just the very definition of risk, I don’t know what is.”
He explained that most people assumed 2020 was going to help prices recover, but then everything hit a wall. That’s one reason the webinar can help farmers. The goal is to go through how to navigate the DMC program as a whole. “We decided to make a significant change in that Dairy Margin Coverage Decision Tool that we had. That tool was using futures and options markets to try to forecast what we thought the margin was going to be. And a lot of people did make decisions based on the fact that it didn’t look like we were expecting any payouts at the end of December 2019 for the year 2020,” Stephenson explained.
He said that’s what risk really is and that’s why the tool was changed so much. “We’re still using futures and options contracts, but this time we’re only calculating what we expect the cost of feed to be, and from that we can give people an idea about the level of milk price that they’re actually covering,” Stephenson said.
The DMC program webinar will be held Thursday, December 3rd from 12:00 pm – 1:00 pm. Pre-registration is required by e-mailing to scott.reuss@wisc.edu. Registrants will receive e-mail confirmation of their registration which will include the webinar link.
