“Certainly, something I wish I learned!” were the words of a colleague asking me for an educational program about risk management for dairy science students. Risk management tools like the Dairy Margin Coverage (DMC) program, the Dairy Revenue Protection (DRP) program, or the futures and options market are not always part of the curriculum of dairy or animal sciences programs. Consequently, a void may exist for some members of our industry, and it is paramount that we fill this void through innovative educational programs that can reach academic and non-academic audiences.
In 2022, the National Institute of Food and Agriculture of the U.S. Department of Agriculture funded one of our extension projects through the Southern Extension Risk Management Education Program. The project developed an educational workshop titled “Managing Milk Prices Using the Futures Market.” In this workshop, we explained the basic concepts of managing financial risk to farmers, extension educators, or anybody interested in the futures and options market. These are complex topics to those of us who do not have a background in agricultural and applied economics.
To Virginia Cooperative Extension, the objective of extension is to put knowledge in people’s hands. In line with this mission, we recently developed an e-learning extension program to perpetuate the workshop mentioned above and make it freely available to anybody interested in learning about the futures market to manage milk prices. To access the program, request login information by sending an email to firstname.lastname@example.org. After receiving the login information, you will visit https://dairymanagement.cals.vt.edu and access the module.
The module is interactive and has simulations to highlight the main concepts and ensure understanding of the topic. Going through the module takes about 75 minutes.
This module intends to provide a basic overview and understanding of the futures market. By all means, farmers and others should seek the advice of a broker if they are interested in using the futures market for managing milk prices. We hope this is useful to our industry, especially in these times of extreme price volatility.
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(c) Hoard's Dairyman Intel 2023
October 26, 2023