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Analyst says well-managed Dairy LGM is a good tool

A market analyst says for dairy farmers not locked into the Margin Protection Program, the Dairy LGM program can be effective if managed properly.  Francis Felber with Barron, Wisconsin-based Ag Risk Management tells Brownfield, “If you’re out there trying to protect six months or ten months at a time, it’s just not the thing to do.  You need to keep your protection slots narrow and purchase the protection often.  Every month, every other month, just keep them in small groups and it is a wonderful tool for managing your downside volatility.”

Felber says many dairy producers locked into the Margin Protection Program only to learn it wasn’t the best fit for their operation.  “I think the MPP people bought that without knowing exactly what was in it.  They tried hard to discuss it all, but all of the fine things… the devil is in the details as you well know and the market has not been very conducive for making that work or allowing it to work.”

Felber told a group of farmers attending a dairy conference Tuesday there are a number of risk management tools available to work alongside MPP and LGM.  He says choosing the right program levels and additional tools can provide farmers with better risk management.