Brown urged producers to take advantage of services from their dairy cooperatives. “They have all kinds of tools and experience in risk management through futures and contracts. Use their advice.
“It all comes back to tailoring risk management to the individual farm.”
Government policy plays a role in risk reduction. A proposed Dairy Security Act in the farm bill would have allowed producers “buy-up options.” That would have been similar to current crop insurance.
However, that act did not make it through the year-end legislative crunch. Instead, a farm bill extension keeps the current MILC (Milk Income Loss Contract) in place for nine months.
In all management systems, better data collection – and use—will be important to producers, Brown said.
In the end, Brown thanked dairy farmers for their work in providing needed dairy products for U.S. consumers—and those around the world.
Dipping into outlook, Brown said his projection for average milk price in 2013 was up slightly, to $19.40 per hundredweight. That compares to $18.63 in 2012.