Risk Management Education for
Dairy Producers in the 21st Century
MIKE ROBERTS
COMMODITY MARKETING EXTENSION
AGENT, VIRGINIA
FARM BUSINESS MANAGEMENT EXTENSION
AGENT, SOUTHEAST VIRGINIA
Prince George County Extension Office
P.O. Box 68, 6450 Administration Drive
Prince George, VA 23875
804-733-2686; 804-733-2676 fax; 804-720-1993 cell
mrob@vt.edu
Change is inevitable … Except from a
vending machine … Ron Plain
2
Our
deliverables
are still
education. In
light of present
resource
challenges we
“must” respond
in creative
ways to help
our clients
close the
“Knowing vs.
Doing” gap.
Whether it is good or bad depends upon your perspective
Funding
3
 Project funding sponsor:
 This material is based upon work supported by
USDA/CSREES under Award Number 2007-49200-03891
Why the need for something Different?
4
 Shrinking resource pools:


Budgets
Personnel
 Changing extension audiences and delivery
tools/methods
 Expanded role of field extension faculty
 Risk Management more important now than ever
before
Project Time Frame
5
 Pilot project 2006 - $1,000.00
 Outlook 2007/08 - $40,000.00
 Outlook 2008/09 - $50,000.00
 Outlook + County Meetings 2009/10 -
$45,975.00
Project Summary
 Partners:
6
Community Colleges
 Virginia Department of Transportation / Virginia
Dept. of Ag. (VDACs)
 14 U.S. Land Grants / 40+ Specialists
 International:

Universidad Catolica, BA, SA;
 Centre National Interprofessionnel de l'Economie Laitière
(CNIEL) & Maison du Lait

National: State Department
 CME Group, CBOT, eHedger, LLC, DTN
 Farm Credit / Farm Bureau /
 Industry partners – Dan Gramza

Project Summary
7
 Delivery mechanisms:
 Video
Conference utilizing the Internet
Presentations
 On-site
– fully interactive
presentations
 Impact measurement – Focus groups, prepost test, internet survey, personal follow
up
 In the last year - Multiple video
conferencing sites plus live-streaming
video
Project Summary
8
 Participant goals:
 1,500 producers,
 600 extension educators,
 300 community influencers, 100 Small or limited
resource farmers
 Sequential learners ~750.
 Project Goals:
 Present information that helps participants make
better decisions
 Target different geographic regions
 Enlist new & future collaborators
 Make most efficient use of resources
Project Summary
9
 Learning Objectives:
 Understand
risk management tools
 Understand
economic outlook
 Understand
where to find marketing
resources
 Able
to anticipate market movement in
order to make profitable decisions
2009 / 2010 Project Summary
10
 Live Producer meetings: Participated via live video feed
 Live Streaming Video: Participated via live streaming






internet link
Posted meeting materials on VT / Ag. Econ. Website
All meetings were completely interactive with chat and call in
questions
Six extended learner sessions with an educational and an
outlook component
First series focused on cattle producers in SW Virginia
Second series focuses on small and limited farmers in central
and southern Virginia
Third series focused on dairy producers in VA, NC, Penn, and
France
Project Results
11
 Pilot meeting showed a clear need for a good “on-
site/remote” speaker mix.
2006
Matias Nardi of Buenos Aires, SA
Dr. David Anderson – TAMU – Cattle
2006
Dr. Delton Gerloff, UT
Dr. Ron Plain - Cattle
Dr. Emmit Rawles - Cattle
Different room Set ups
2007
Dr. Don Shurley - Cotton
Dr. Gregg Ibendahl - Inputs
Congressman Bob
Goodlatte On-site
Farm Bill Outlook
presentation.
Professor James
Pease On-site Farm
Bill Outlook
presentation.
2008
Small Farmer / Lender Collaboration Meeting, Virginia State University
2009 – New Format
Small Farmer / Lender Collaboration Meeting, Virginia State University
2009
“FARM” 101 Cattle
Producer Marketing Class
17
Futures, Assumptions, Risk, and Marketing
6 – week course for cattle producers
Dan Gramza – CME
Group, Chicago
Explaining Candlestick
Charts and trading
strategies.
Project Adjustment: =
“How To” + “Outlook”
component.
2009
Good view of room and what Ron Plain saw on his end.
2009
“FARM” 101 Cattle Producer
Marketing Class
Students had homework and old
fashioned handouts to aid distance
presenters
Two young men discovered they
had enough cattle to hedge if
they worked together. Dads went
along with it.
Made money too!
6 classes involved over 270
participants
2009
“FARM” 101 Dairy
Producer Marketing Class
20
Futures, Assumptions, Risk, and Marketing
Veronique Pilet – Paris,
France
Hosted dairy
producers in
Paris, France
simultaneously
at risk
management
meetings
Dairy Risk Management Workshop series
France and EU : a market outlook
6 classes for 520 dairy producers in
VA, NC, PA, MD, and WV
Introduced Live-Streaming-Video =
45,967 participants in 41 states and 19
countries
2009/10
Example of what we learned?
EU - Dairy 21production
 2.5 million dairy farms
 Average 10 cows/farm ! (~ 40 cows in big
dairy member states)
 134 million tons of milk delivered (2008)
1st Germany : 27.8 MT
 2nd France : 23.8 MT
 3rd United-Kingdom : 13.4 MT

Dairy production in the world
In 2008 (million tons)
Share / Total
22
Europe 213
31%
UE of 27 152
Russia 33
Ukraina 12
Belarus 6
North Am. 95
14%
USA 86
Canada 8
Central Am. 17
2-3%
Mexico 11
South Am. 56
8%
Brasil 28
Argentina 10
Colombia 7
CNIEL / FAO june 2009
Asia 247
36%
Africa 36
5%
India 106
China 42
Pakistan 35
Turkey 12
Sudan 7
Kenya 4
South Af. 3
Oceania 25
3-4%
N-Zealand 15
Australia 9
Total World : 688 million tons
Key dairy figures for France
23
 83,000 dairy farmers, 200,000 direct jobs
 2nd milk processor in Europe
 700 processors, 60,000 jobs
 Turnover 23.4 billion €
 3 French dairy groups among the first 15 in
the world
 Commercial balance : 2.9 billion €
Dairy farms in France
24
West : almost
60% of French
milk
Mountains : 15% of
French milk
CNIEL d’après Enquête Annuelle Laitière
Impacts
25
 Impacts were measured by:
 Meeting
Surveys
 Key Informant Interviews
 Focus groups
 Mail surveys
 Follow up phone calls
 Follow up visits
 Follow up, follow up, follow up!
Impacts
 IMPACTs to Date:
26
 1,596 producers, 701 Extension agents, 591 agriculture community
influencers, and 3,006 extended learners (45,967 streaming video).
 By respective year:
 2006:
Pilot: 49 producers, 7 Extension agents, and
23 ag. influencers participated;
 2007:
146 producers, 57 Extension agents, and 94
ag. influencers participated;
 2008:
272 producers, 79 Extension agents, and 139
ag. influencers participated.
 2009/10:
1,129 (270 beef + 520 dairy) producers, 285
Extension agents, and 335 Ag. Influencers; 119
small/limited resource farmers; … Streaming video for
dairy only.
Impacts
 2006 – 2010: Increased Aggregate net profits in the amount
of $5,166,099.31
27
 2006: $39,500.00 was made in additional profits
 2007: $638,116.50 was added to the bottom line due to
$365,107.50 in additional revenue and $273,009.00 in input
savings
 2008: $899,085.00 / $456,055.00 in nitrogen savings &
$443,030.00 additional revenues from forward commodity
sales and hedging activities.

2009/10: $3,589,397.81 / $1,148,607.30 in input savings
& $2,440,790.51 in risk management strategies.
Savings in speaker travel costs = $281,905.00
2006: $4,005.00 / 2007: $27,575.00 / 2008: $36,825.00 /
2009/10: $213,500.00
Project Results
Closing the “Knowing
vs. Doing Gap”
28
 Producers:
 99% (+2% over last year) of participants said they had a
better-to-much-better understanding of the current local,
regional, and world market outlook for their relative
commodity group or business interest
 100% said they where better able to find more marketing
resources
 86% (+5%) said they would be better able to anticipate
market movement and make profitable decisions
 95% (+4%) said they gained a better understanding of how
to use the futures market and other risk management tools
Project Results
Closing the “Knowing
vs. Doing Gap”
29
 Extension Agents:
 96% (+7%) acquired more up-to-date knowledge of
commodity market outlook
 87% (+11%) said they were more comfortable passing
along marketing and outlook information learned in the
seminars to clients.
 93% (+2%) said they gained a broader knowledge of risk
management tools and current market strategies
 95% (+66%) said they would help support another
project via a more active role in advertising and
encouraging clientele to attend.
Project Results
Closing the “Knowing
vs. Doing Gap”
30
 Ag. Influencers :
 100% Learn most up-to-date economic and
market outlook
 100% said information presented in seminars
would allow them to better serve their clients and
help them maximize profits
 100% fully endorsed the current Outlook project
and expressed a willingness to participate more
pro-actively in future projects
Project Results
 Unexpected:







Closing the “Knowing
vs. Doing Gap”
31
Producer collaboration – hedging, truck load lots, etc.
Producer networking on input buying
International Extension audiences consisted of 43 South
American cattle producers in Buenos Aires, SA … and … 72
French dairy producers in western France
Now collaborating with 3 international firms (CME Group;
FMX Securities; and Gramza Capital) in 4 countries
(France, Argentina, New Zealand, & Japan) to bring risk
management education to producers.
Last dairy RM series of 6 workshops reached over 50,000
producers in 43 states and 19 countries in real time.
France wants to collaborate in developing an Extension
type consulting program for dairy producers
Both France and China are interested in working to find
new dairy production opportunities in the U.S.
Lessons Learned in over 4+ years
32
 Must have local support in marketing the program
 Must give participants something worth their while besides





supper (ie. “Must realize their time is valuable!”)
1 Old Extension program model still viable – Give them a
“How To” segment combined with a Risk Management
segment
People still want UNBIASED opinion and research
Multiple meeting format allowed participants to build
beneficial collaborative and party/counterparty
relationships.
Multi-generational participants liked the technology
Older generation producers want to “see” a speaker –
younger generation okay with “webinar-type” program
Lessons Learned in over 4+ years
33
 Technology is simple, flexible, and can maximize
limited fiscal and physical resources
 This may be a new paradigm to reach world-wide
audiences in real time
 The Extension “Hey-Days” of the 60’s and 70’s are
over. Multi-generational students are more
“Techno-Savvy” and will use technology to get
information – whether Extension provides it or
not
 Information providers “must” come into the 21st
Century with 21st Century methods
34
Questions
?
A strong positive attitude will contribute more than any wonder drug.
Patricia Neal
35
Where there is a will there is a way, sometimes we just need a
helping hand.
Today more than ever we must join together and be willing to help one another find
the way to success.
Mike Roberts
Virginia Regional Market Analysis
and Outlook utilizing the Internet
as an Interactive Delivery System
36
MIKE ROBERTS
COMMODITY MARKETING EXTENSION
AGENT, VIRGINIA
FARM BUSINESS MANAGEMENT EXTENSION
AGENT, SOUTHEAST VIRGINIA
Prince George County Extension Office
P.O. Box 68, 6450 Administration Drive
Prince George, VA 23875
804-733-2686; 804-733-2676 fax; 804-720-1993 cell
mrob@vt.edu