Annual Report
Price Risk Management: A California Dairy Perspective
*Pei Xu
Todd Lone
Patrick Berends
Department of Agricultural Business
California State University Fresno
* Corresponding author, pxu@csufresno.edu; 559-278-5685
1
Background
Dairy production is an important subsector in California’s agricultural economy. In
2008 the dairy industry; 1) sent over 41 billion pounds of milk to the State’s 117 dairy
processing plants; 2) supported 443,574 jobs in the production, input and retail sectors; and
3) added $63 billion in economic activity to California(California Milk Advisory Board,
2010). However, California’s dairy industry is faced with significant financial challenges and
many of its producers are experiencing substantial financial hardship. Economic recessions,
uncertain demand for dairy products, enhanced variability in milk prices, and skyrocketing
feed costs have all contributed to the challenges facing California’s dairy industry. The
impact of these factors on the number of dairy farms is clear, 109 California dairies ceased
operations in 2009 (representing 6% of the state’s dairy herds) and 37 more announced
bankruptcy in 2010 (CDFA, Dairy Marketing Branch, 2009; 2011).
Uncertainty in milk price and feed costs are two major sources of financial risks
borne by dairy producers (Valvekar et al. 2011). Starting in 2000, milk price variation
became a common occurrence while government sponsored milk price supports fell below
market clearing levels (Gould&Cabrera, 2011;Valvekar et al. 2011). On the cost side,
compared to Midwest and Northeast dairy farming states, the impact of feed cost uncertainty
is more significant for California dairies because California producers typically purchase
more of their feed, while Midwest and Northeast producers grow more of their feed (Public
Hearing Report, 2008). USDA cost of production data reveal that compared to 2007 levels,
the cost paid by California dairy producers in 2008 for alfalfa hay and corn went up by 65%
and 45%, respectively(Sumner, 2008; Erba, 2008). Given milk represents more than 90% of
a typical farm’s dairy income and feed costs represent over 40% of its variable costs of
2
production (ERS, 2009; Ishler et al., 2009), the ability to lock in a higher milk price or a
lower feed cost through futures and options contracts could be crucial for farm success.
Recently, the California Center for Cooperative Development conducted a USDA
funded project which analyzed the recent dairy crisis and proposed six management
strategies individual dairy farmers could practice to improve farm-level economic returns
(Ellerby, 2010). Among these six strategies, the ability to manage price risk was listed as a
critical skill that all California dairy managers should have in order to remain profitable.
However, to many California dairy producers, futures and options trading is a concept that
they know little about. Futures and options contracts for dairy products currently available at
the Chicago Mercantile Exchange (CME) include class III (cheese) and class IV milk (dry
milk), and since May 2010, the trading of skim milk powder has been available (Jesse and
Cropp, 2009). These futures contracts trade across all twelve months, with the class III milk
futures trading unit specified as 200,000 pounds per contract (CME 2010). It is
recommended that if a producer hedges their milk price, he/she should hedge feed cost to
reduce its variability as well.
Besides futures and options contracts, a federal reinsured financial instrument called
the Livestock Gross Margin Insurance for Dairy Cattle (LGM-Dairy) program has been
available to dairy farmers in the lower 48 States since 2008 (Valvekar at el. 2010). This
program allows dairy farmers to establish a milk price floor in advance of milk sales, helping
to offset unanticipated variability in feed costs. Compared to futures option contracts which
require a premium payment at the time of contracting and have a high margin call, the LGMDairy contract: 1) allows delayed premium payment; 2) does not require a margin call
3
payment; and 3) provides significant premium subsidies to all adopting dairy producers
(Gould&Cabrera, 2011).
Recent studies about dairy producers’ adoption of price risk management instruments
focused on Wisconsin dairy producers (Gould and Cabrera, 2011; Valvekar et al. 2010;
Valvekar et al. 2011). Valvekar et al. identified the lowest cost price insurance contract for
targeted income over feed cost under the LGM-Dairy program for a typical 120-cow
Wisconsin dairy producer in 2010. Gould and Cabrera (2011) found the optimal producer
paid premium to obtain targeted gross revenue for a 150-cow farm in Wisconsin and that
with $1.1 deductible the net premium was $6,445 or $0.30/cwt of covered milk. However,
the results of these studies cannot be applied to highly concentrated California dairies that
typically average 800 cows (Western United Dairymen, 2010).
Despite the availability of price risk management instruments, not many California
dairy producers have reported using them. Time constraints and complexity of the price risk
management mechanism are the two main reasons given for the lack of utilization (Ellerby,
2010). Indeed, many producers are worried about being locked into low milk prices due to
their unfamiliarity with futures and options trading. However, many agricultural lenders
require dairy producers to use price risk management as a covenant in the loan documents to
protect their investments. Therefore, without actively using futures and options contracts to
help minimize price risks, dairy producers may face increased difficulties securing financial
support from their lenders.
California is the largest dairy producer in the United States, accounting for 18.9% of
the nation’s total products sales. Its producers’ adoption of price risk management
instruments remains low despite ongoing efforts of the USDA’s dairy assistance programs to
4
involve California dairy farmers in price risk management strategies. From 1999 to 2002, the
USDA’s Risk Management Agency administered a Dairy Options Pilot Program which
offered various seminars to inform dairy producers about futures and options trading.
Unfortunately, the agency did not publish the results of interviews from California producers
regarding feedback about the seminars. A summary of interviews with market administrators
in eleven regions, including California, was published but these results cannot be used to
explain a typical California dairy farm’s engagement in price risk management activities
(California Department of Food and Agriculture, 2002). Since 2002, no further academic
research on the topic was published.
This ARI seed grant funded study aims to:
1. understand the farm level costs associated with price risk management strategies;
2. understand the factors affecting California dairy farmers’ use of price/cost risk
management tools;
3. determine producers’ opinions towards the effectiveness of these tools;
4. identify the barriers and the motivations to adopt price risk management tools; and
5. determine what is needed to improve CA dairy farmers involvement in effective
price/cost risk management strategies.
Methods
Milk price risk has been pervasive in California’s dairy markets. Participating in
futures trading is one effective way to minimize price risk and improve farm revenues, and
this linkage is well established by numerous agricultural economics studies (Berck 1981;
Miller & Kahl, 1981; Goodwin & Schroeder 1994; Mishra & Goodwin, 2006; Gould and
Cabrera, 2011; Valvekar et al. 2010; Valvekar et al. 2011). To gather data and analyze
5
California dairy producers’ participation in futures trading, face-to-face interviews were
administered during the Western United Dairymen’s 2013 annual conference held from
March 27 to 29 in Sacramento, CA. The organization represents more than 60% of the milk
produced in California and has been providing annual price risk management seminars to
California dairy producers since 2009. The risk management educational sessions are often
made available during each spring’s annual conference.
One of the researchers has built a strong connection with Western United Dairymen
and was able to obtain their support for administering a survey during the annual conference.
The organization provided us with booth space at the entrance to the main convention floor
that enabled us to display information regarding the survey's purpose, plus sponsorship
banners and paraphernalia for Fresno State, the Department of Agricultural Business, and the
Center of Agricultural Business. Thirty-two dairy farmers out of a total of 135 that attended
the conference (a 24% response rate) completed the survey. Discussions with the dairymen as
they were completing the survey revealed that many did not utilize the risk management tools
of interest, primarily due to a lack of knowledge about them. The few that did use the tools
were enthusiastic about their use and were very willing to share their experiences. In
addition, a common comment with regard to the survey was that some of the classifications
were too broad or too narrow and they felt more stratification would be useful in determining
the choices. The dairy farmers were very supportive of college education workshops in
general and mentioned strong support for not only Fresno State, but also UC-Davis’ and Cal
Poly, San Luis Obispo's Colleges of Agriculture.
The user questionnaire was 10 pages in length and contained 48 questions regarding:
1) general farm business information; 2) dairy farmers use of price and cost risk management
6
tools; and 3) barriers and motivations to adopt price risk management strategies. A shorter
version comprised of 14 of the 48 questions in the full questionnaire was used to interview
non-users of price risk management instruments. This version asked questions about general
farm business information; the reasons for not using risk management tools; and what help
would be needed to get started using risk management tools. A copy of the questionnaires is
provided in the end of this report.
Results
Farm Business Information
Participating dairy farms’ business information is shown in Figures 1 through 6.
Analysis results indicate approximately 23% of the dairy farms have been in family
ownership for at least 8-25 years and 47% of the respondents stated that the family has
owned the farm for more than 41 years. All participating dairy managers reported at least 12
years of management experience in dairy farming, with 47% of them reporting more than 36
years of experience. The sample included smaller dairy farms of 500 cows or less (25%),
mid-sized dairies of 501-1500 cows (50%), and larger dairies with more than 1500 cows
(25%). Over two thirds of the participating dairy farms hired at least six full time workers
(72%) and 48% of them hired at least one part time worker. In terms of land ownership, 31%
of the farms were 200 acres or less; 35% owned 201-500 acres and the remaining 33%
owned at least 500 acres.
7
Years of management experience in
dairy farming
(count: n=32)
Years farm in family ownership
(Count: n=32)
22%
22%
8-25 years
22%
22%
12-20 years
26-40
21-35
41-60
25%
36-46
61 years or more
31%
25%
Total number of cows
(count: n=32)
Number of full- me workers
(count: n=32)
9%
25%
13%
500 or below
16%
47-70
31%
28%
0-5
501 - 1000
6-10
19%
1001-1500
11-15
1501-4000
19%
16-80
4001 or more
31%
41%
Number of part- me workers
(count: n=25)
Acres owned in 2013
(count: n=32)
4%
4%
19%
1
31%
2
20%
201-300
3
52%
20%
200 acres or below
301-500
16%
4
501-1000
5
16%
1001 or more
19%
Figures 1-6: Participating Dairy Farms’ General Business Information
Farm managers’ profile information is presented in Table 1. The number of family
members supported by the dairy appeared to be relatively small, with 42% of them
comprised of only 1-3 family members and about one third of them comprised of six to seven
family members. Sixteen percent of the managers were 35 years of age or younger, 28%
were 45-54 years old and 16% of the managers were 65 years and over. Thirty-eight percent
of the managers have never attended a college, 42% of them have attended or graduated from
8
a two-year college and the remaining 20% have attended or graduated from a four-year
college.
Table 1: Farm Managers’ Profile (Sample Size = 32)
Count
Percentage
3-4
5-6
7 and over
Total
13
8
10
31
42%
26%
32%
100%
under 35 years
35-44
45-54
55-64
65 and over
Total
5
6
9
7
5
32
16%
19%
28%
22%
16%
100%
2
10
6
6%
32%
19%
7
3
3
31
23%
10%
10%
100%
Number of family members:
Owner's age:
Highest level of education:
Attended high school
High school graduate
Some 2-year college experience
Graduate of 2-year College
or technical school
Some 4-year college
College graduate
Total
Most of the participating dairy managers were members of a dairy cooperative (84%)
(Figure 7). The surveyed managers also held leadership positions in local (72%), state (66%)
and regional (28%) dairy organizations (Figure 8). Dairy ownership structure was
approximately evenly split between partnerships and sole proprietorships, with very few
structured as a corporation, cooperative or a limited liability company (Figure 9).
9
Member of a dairy coopera ve
(count: n=32)
16%
Yes
No
84%
Leadership in dairy organiza ons
(count: n=32)
13%
Local
38%
15%
State
Regional
Na onal
34%
Ownership classific
a
(count: n=32)
3%
on
13%
Sole proprietorship
3%
39%
Partnership
LLC
Coopera ve
42%
Corpora on
Figures: 7-9: Leadership Positions and Ownership Classification
The Use of Price and Cost Risk Management Tools
Of the 32 responses, 13 represented existing users of risk management tools and 19
were non-users. Responses from those using management tools to reduce milk price risks are
shown in Table 2. Participation in forward contracts, futures contracts and the Livestock
10
Gross Margin (LGM) Insurance was low. A total of 8 farms were involved in risk
management activities to reduce milk price risks: five have used futures contracts; two have
used forward contracts; and only one had used LGM insurance.
Some users of risk management tools had started using the tool before 2009. Futures
contracts were used to cover 25-50% of the farm’s milk; forward contracts were used to
cover 20-30% and the LGM insurance was used to cover 5% of their milk. Forward contracts
were found to be the most costly type of risk management tool, with estimates reaching more
than $4,000 per year. The federal reinsured financial instrument of the insurance program
had a cost of less than $500 per year. The cost of the futures contracts varied from less than
$500 to more than $4,000/year, depending on the level of price risk protection. The time
needed to manage each of the management tools differed: the insurance program required
less than an hour per week; forward contracts required 1-3 hours per week; and futures
contracts varied from less than an hour per week to 1-3 hours per week.
The more expensive forward contracts resulted in profits of $4,000 per year while the
less expensive insurance program brought in a smaller profit of less than $500 per year. The
profit from futures contracts varied from $500 - $3,000 per year but the two managers who
started in 2011 had lost more than $3,000 per year. Participants of risk management activities
believed that forward contracts, futures contracts and the insurance programs were useful risk
management tools.
Table 2: The Use of Management Tools to Reduce Milk Price Risks
Number of farmers
using the tool
Forward Contracts
Futures Contracts
Gross Margin
Insurance
2 out of 13
5 out of 13
1 out of 13
11
Year farmer started
using the tool
One farmer started
before 2009; one in
2010
Varies from before 2009 to 2010
and 2011.
Started before
2009
Percentage of milk
covered by tool
20-30%
25%-50%
5%
Amount spent to
purchase contracts
More than
$4,000/year
Varies from less than $500/year
to more than $4,000/year
Less than
$500/year
Time spent managing
the account
1-3 hours/week
Varies from less than an hour per
week to 1-3 hours/week.
Less than 1
hour/week
One farmer started in 2010 made
$500 profit and one started
before 2009 made $3,000 per
year. Two started in 2011 lost
more than $3,000/year.
Less than
$500/year
All users agreed that futures
contracts are useful.
Agreed that
gross margin
insurance is
useful.
Profit made
Consider an efficient
risk management tool
More than $4,000
Both farmers agreed
forward contracts
are useful.
All 13 managers citing experience using risk management tools had used forward
contracts to reduce feed cost risks; 12 of them started before 2009 and one started in 2010
(Table 3). Forward contracts were used to cover 20-100% of their feed, depending on the
operation, with an average of 43% of the feed for all operations covered by forward
contracts. Though seven of the respondents did not indicate the amount spent to purchase
forward contracts, four of them mentioned that they had spent more than $4,000 per year;
one spent between $1,000 and $1,999 per year; and another spent one less than $500 per
year. The time spent managing the forward contracts account was small, with most
respondents indicating they spent 1-3 hours per week or less. Respondents believed forward
contracts were very useful to reduce their feed cost risks; eight of them said that it saved
them more than $4,000 per year and one reported savings of $2,000-2,999 per year.
12
Five of the 13 respondents had used futures contracts to reduce feed costs risks; four
of them started before 2009 and one started in 2012. Futures contracts were used to cover 15100% of the feed costs, depending on the operation, with an average coverage rate of 43%.
Three of the users spent more than $4,000 per year and one spent less than $500 per year on
futures contracts. Managers reported spending about 4-6 hours per week managing their
accounts. In addition, users indicated that futures contracts made them more than $4,000
profit per year and felt it was a useful risk management tools to reduce feed cost risks.
Only one dairy farm manager had used the federal reinsured LGM insurance program
to reduce feed cost risks. This dairy farm started using the insurance in 2011 and covered
10% of its feed. The manager spent less than $500 per year on the program and used about 13 hours per week managing the account. The profitability of using this tool ranged from
$500-999 per year. The manager believed that the insurance was useful tool for reducing feed
cost risks.
Table 3: The Use of Management Tools to Reduce Feed Costs Risks
Forward Contracts
Futures Contracts
Gross margin
insurance
Number of farmers
using the tool
All 13 users
5 out of 13
1 out of 13
Year farmer started
using the tool
12 started before
2009, one in 2010.
Four started before 2009 and one
in 2012.
Started in 2011
Percentage of feed
covered by the tool
Ranges from 20% to
100% with an
average of 43%.
Four spent more
than $4,000. One
spent between
$1,000 and $1,999
and one less than
$500 per year. The
rest of them did not
answer.
Most spent 1-3
Varies between 15% and 100%
with an average of 43%
10%
Three spent more than
$4,000/year and one less than
$500/year
Spent less than
$500/year.
Spent about 4-6 hours/week
1-3 hours/week
Amount spent to
purchase contracts
Time spent managing
13
the account
hours/week or less
Profit made
Eight saved more
than $4,000, and one
saved $2,0002,999/year.
All agreed it is a
useful tool with four
of them strongly
agreed.
Consider an efficient
risk management tool
Made more than $4,000/year
$500-999/year
All five agreed it is a useful tool
Agreed it is a
useful tool
Barriers and Motivations to Adopt Price Risk Management
Ten of the thirteen existing users of risk management activities provided explanations
about why they decided to adopt the available tools (see Table 4). Four of the respondents
used the tools to help manage input cost risks and three of those respondents also used the
tools to maintain a price over cost margin. One respondent used futures contracts in the past
but, after substantial losses on futures positions, he/she had discontinued the pursuit. This
respondent felt that margin management/authentic software that helps hold positions and
calculate gains/losses would be useful. Other respondents requested educational programs to
better understand each of the risk management tools.
Table 4: Reasons to adopt and help needed to improve adoption
Response
Number
1
2
3
4
If you have used milk price or feed cost
price risk management tools, please help
us understand why you decided to use
these tools.
Up till now we have only forward
contracted certain feeds, but we are
educating ourselves on the futures
market
Attempting to save money
To help manage my input costs and
maintain a margin
To set some of my costs a manageable
price, but still put myself at risk because
I did not tab up output figures
14
What additional help would you
require in order to improve your
involvement with price risk
management tools?
More education
Seminars, other education
5
9
Hope to lock in a favorable price, when
the potential for this commodity seems
to increase in the near future.
Had ideas and hope we could hedge to
save money, but after substantial loss on
futures positions we have stayed away
Protected my bottom line on 20-30% of
my income/cost
My pockets are not large enough to
survive the downturns in the market
To prevent volatility in manage margins
10
To cover risks
6
7
8
Margin management/authentic
software that helps hold/calculate
positions on the market
Education
Need to understand "basics" better
for feed and milk
Table 5 contains the reasons why eighteen of the nineteen non-users did not use risk
management tools. Nine respondents stated it was because they did not understand the
concept of risk management well. For example, one respondent said “risk management has
not been explained in a layman’s language.” A similar sentiment was expressed by two other
respondents. In addition, one of the respondents indicated they had used risk management
activities in the past but stopped due to their limited knowledge and skills using the tools.
Two respondents felt they did not need additional risk management protection due to their
involvement with other risk reduction activities such as marketing show cattle and the milk
pool quota. One respondent said they would not participate because fellow dairymen who
had tried risk management indicated they had all lost money doing it. However, most
respondents requested educational programs to help them better understand the programs.
Table 5: Reasons not to adopt and help needed to Use Risk Management
Number
1
2
Please help us understand why you not
to use risk management tools.
Looked at it doesn’t pencil out
I don't understand the risk and what
would it cost.
15
What help would you require in
order to get you started using price
risk management tools?
Understanding them better
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Stop shortly after starting using futures
contracts due to unleveled skills playing
with the processor
I do not trust them yet.
California pricing is different than CMI
I feel you will lose more than gain.
Small registered herd provides extra
income by showing at fairs and
marketing show cattle.
I have taken a few classes on it but it is
still complicated and it takes an
investment that we do not have at the
moment.
The education to use of risk
management
Did not understand enough
Grow 50% of my feed, invest in pool
quota now at 90-95% of production
Risk management has not been
explained in a layman’s language.
There is still risk
From fellow dairymen who have tried
risk management, overall all lost money
doing it.
Never thought about it
Do not understand and no experience
involved
Do not understand well.
I would need to meet someone I
could trust.
Not sure
More education on subject.
Not too many people want to lose the
upside for a small margin lock
especially when there are such high
& lows that we need to capture as
much highs to make up for the losses.
If we could get our equity back
maybe we would start locking in
margins.
Ambition to attend classes
Better information at an easier
language
Someone to work with
Explain it to us
Explained in layman terms
Tutoring
Future Research Suggestions
 Identify three producer scenarios to analyze the net benefits of using futures contracts
and LGM insurance. Possible scenarios include: one small (<500 cows); one midsized (about 1600 cows); and one large dairy (over 3,000 cows).
16
 Develop a website with resources to educate dairy farmers on the use of futures,
options and the LGM-insurance program.
 Conduct a series of workshops related to forming risk management strategies that
utilize futures, options and the LGM-insurance program.
References
Baumgart-Getz, A., Prokopy, L.S., Floress, K. (2012) Why Farmers Adopt Best Management
Practice in the United States: A Meta-analysis of the Adoption Literature. Journal of
Environmental Management, 96:17-25
Berck, P. (1981) “Portfolio Theory and the Demand for Futures: The Case of California
Cotton.” American Journal of Agricultural Economics, 63(August):466-474
California Department of Food and Agriculture, Report to the Senate Committee on
Agriculture and Water Resources and the Assembly Committee on Agriculture: Dairy
Marketing Study. Washington: GPO, April 2002. Online. Available:
www.cdfa.ca.gov/dairy/pdf/sb870DairyStudyBill.pdf
California Department of Food and Agriculture, Dairy Information Bulletin Cover Pages.
Available: http://www.cdfa.ca.gov/dairy/dairy_info_bulletin.html January 31, 2012.
California Milk Advisory Board, (2010) “New Study: California Dairy Industry Responsible
for More than 443,000 Jobs – Three Percent of State’s Job Production”, Online,
Available: http://www.californiadairypressroom.com/node/289 (January 2012).
Davis, T. D., Patrick, G.F., Coble, K.H., Knight, T.O., & Baquet, A. E. (2005) Forward
Pricing Behavior of Corn and Soybean Producers. Journal of Agricultural and Applied
Economics. 37(1):145-160.
Ellerby, J. (2010) “Challenges and Opportunities for California’s Dairy Economy”,
California Center for Cooperative Development. Online. Available:
www.cccd.coop/events/DairyOpportunities
Erba, E. M. (2008) “Dairy Situation and Outlook 2008.” Proceedings, 2008 California
Alfalfa & Forage Symposium and Western Seed Conference, San Diego, CA, December,
2008.
Garrett, P., & Schulman, M.D. (1984) Division of Labor and Decision Making among
Smallholders: A Male/Female Comparison. Paper presented at the Annual Meetings of
the Rural Sociology Society, College Station, Texas.
17
Goodwin, B. K., & Schroeder, T.C. (1994) Human Capital, Producer Education Programs,
and the Adoption of Forward-Pricing Methods, American Journal of Agricultural
Economics, 76(4):936-947
Gould, B.W. & Cabrera, V.E. (2011) USDA’s Livestock Gross Margin Insurance for Dairy:
What is it and How Can it be Used for Risk Management. Online:
future.aae.wisc.edu/lgm-dairy/lgmdairymanual.pdf (January 31, 2012).
Hearing Panel Report, Based on a Public Hearing Held October 30 and 31, 2008, California
Department of Food and Agriculture, Online, Available:
http://www.cdfa.ca.gov/serp.html?q=economic+slowdown&cx=00177922524537274784
3%3Avw__adoufr8&cof=FORID%3A10&ie=UTF-8&submit.x=0&submit.y=0
(January 2012).
International Dairy Foods Association, IDFA Dairy Policy Recommendations: Providing a
Path to Growth and Opportunity, 2011. Available:
http://www.idfa.org/files/documents/147_IDFA_Dairy_Policy_Recommendations_0422.
pdf (January 31, 2012).
LaMendola T., (2009) Western United Dairymen, Question and Answer Session. Online,
Available:
http://www.progressivedairy.com/index.php?option=com_content&view=article&id=228
4:032009-western-united-dairymen-will-hold-its-annual-convention-march-4-6-at-thedouble-tree-hotel-in-rohnert-park-california-the-conventions-theme-is-qfield-ofdreamsq&catid=99:past-articles (January, 2012).
Miller, S.E., & Kahl. K.H. (1987) “Forward Pricing when Yields are Uncertain.” Review of
Futures Markets. 6:21-39.
Mohammed, M., and Ortmann, G.F. (2005) Factors Influencing Adoption of Livestock
Insurance by Commercial Dairy Farmers in Three Zobatat of Eritrea, Agrekon,
44(2):173-186.
Sumner, D. A. (2008) “Impact of Recent Commodity Price Fluctuations on Farms in
California and a Historical Perspective on Prospects for the Future.” Giannini Foundation
of Agricultural Economics, University of California Davis.
Valvekar, M., Cabrera, V.E., and Gould, B. W. (2010) Identifying Cost-minimizing
Strategies for Guaranteeing Target Dairy Income Over Feed Cost via Use of the
Livestock Gross Margin Dairy Insurance Program. Journal of Dairy Science, 93:33503357
Valvekar, M., Chavas, J.P., Gould, B.W., and Cabreca, V. E. (2011) Revenue Risk
Management, Risk Aversion, and the Use of Livestock Gross Margin for Dairy Cattle
Insurance. Agricultural System, 104:671-678
18