Are you scratching your head to figure out how bad life could be in a worst-case milk margin scenario under MPP-Dairy? Have no fear — there’s an app for that.

After consulting with large herds looking to ensure they had enough equity to cover their own worst-case scenario, Dr. Marin Bozic, assistant professor of dairy foods marketing economics at the University of Minnesota, decided to make a spreadsheet to help, called the MPP-Dairy Max Loss Calculator.

The tool is a bit more complicated than other MPP tools developed by the Dairy Markets and Policy team of economists, but will get you a penny-specific answer of your maximum loss per hundredweight if you provide 6 numbers:

  • Non-feed operating costs
  • Expected basis over MPP (in a bad year)
  • 2015 milk production growth over production history
  • Coverage percentage
  • MPP Coverage level
  • MPP premium amount (provided)

The tool is in it’s beta version right now, so if any bugs are found please contact Dr. Bozic. Click here to download: http://bit.ly/1IDkrcs

Example scenario:

Non-Feed Operating Costs

$7.75

Expected Basis over MPP in a Bad Year

$2.00

2015 Milk Production Growth over PH

3.0%

Coverage Percentage

90%

Percent of 2015 Milk Covered under MPP

87.4%

Needed MPP IOFC for No Losses

$6.58

MPP Coverage Level

$5.00

MPP Premiums (select applicable from table)

$0.040

Maximum Losses

$1.62