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Adoption of Milk and Feed Forward Pricing Methods by Dairy Farmers

Published online by Cambridge University Press:  12 June 2017

Christopher A. Wolf  and
Nicole J. Olynk Widmar
Christopher A. Wolf
Affiliation:
Department of Agricultural, Food, and Resource Economics atMichigan State University, East Lansing, Michigan
Nicole J. Olynk Widmar
Affiliation:
Department of Agricultural Economics atPurdue University, West Lafayette, Indiana
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Abstract

Increasing volatility in milk and feed prices has led to higher levels of market and financial risk for dairy farmers. We examine dairy farmer use of forward pricing methods for milk sales and feed purchases. Operators with larger herds, higher levels of education, and those farm businesses that were not organized as sole proprietorships were more likely to have used forward pricing. We also examine reasons dairy farm operators had not used these tools to date and find that the most common reason was lack of knowledge. These findings may be used to target educational seminars and outreach to dairy farm managers.

Keywords

dairy farmersfeed priceforward pricinghedgingmilk pricerisk managementG13Q12Q13
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 4 , November 2014 , pp. 527 - 541
Copyright
Copyright © Southern Agricultural Economics Association 2014

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