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Risk Management & CME

Essential Market Information

Timely and accurate information about the markets is essential for people in the business of producing commodities. Edge’s members have access to the latest dairy numbers as well as analysis of how policy is affecting prices.

See below for more information on current market numbers.

cows

Class III Milk

Futures and Options

Class III Milk
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Program on Dairy Markets and Policy

Decision tool to help producers make their participation selection

Program on Dairy Markets and Policy
soybean (1)

Soybean

Futures and Options

Soybean
soybean

Soybean Meal

Futures and Options

Soybean Meal
corn

Corn

Futures and Options

Corn

Risk Management Tools

Managing financial risk is a critical consideration for dairy farmers, who operate their businesses amid volatility. Farmers have a number of tools to use.

See below for the risk management tools available to dairy farmers.

Dairy Margin Coverage Program (DMC)

The Dairy Margin Coverage Program (DMC), which replaced the Margin Protection Program for Dairy, is a voluntary program that provides dairy operations with risk management coverage that will pay farmers when the difference (the margin) between the national price of milk and the average cost of feed falls below a certain level selected by the program participants. All dairy farms are eligible for the program, which is managed by USDA’s Farm Service Agency.

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Dairy Revenue Protection (Dairy-RP)

Dairy Revenue Protection (Dairy-RP) is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level. The expected revenue is based on futures prices for milk and dairy commodities, and the amount of covered milk production elected by the dairy producer. The covered milk production is indexed to the state or region where the dairy producer is located. Dairy-RP is available in all counties in all 50 states. This insurance is administered by USDA’s Risk Management Agency but sold by private insurers.

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Livestock Gross Margin Insurance Plan for Dairy Cattle

The Livestock Gross Margin Insurance Plan for Dairy Cattle (LGM-Dairy) provides protection when feed costs rise or milk prices drop and can be tailored to any size farm. Gross margin is the market value of milk minus feed costs. LGM-Dairy uses futures prices for corn, soybean meal, and milk to determine the expected gross margin and the actual gross margin  LGM‑Dairy is similar to buying both a call option to limit higher feed costs and a put option to set a floor on milk prices. This insurance is administered by USDA’s Risk Management Agency but sold by private insurers. 

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