Protecting your profits call shows strong margins, opportunities

2/15/2014 7:00 AM

HARRISBURG, Pa. — The Center for Dairy Excellence hosted its monthly Protecting Your Profits conference call, which documented recent movement in the dairy commodity markets.

Alan Zepp, risk management program manager, led the conference call and reported on the current trend toward strong dairy prices.

“With the LGM Dairy sales period (Jan. 31), prices are at historically high levels and margins are well above both the five-year and 10-year average,” said Zepp. “The best case scenario would be that a producer who purchases a LGM policy would pay a 17-cent premium per hundredweight and not receive an indemnity. That would mean we would have a really strong year in dairy, but we don’t know how long prices will hold.”

On the call, Zepp shared updates on both national dairy industry statistics and local milk production trends that were reported in the Pennsylvania Dairy Industry Performance Scorecard. He also discussed the factors influencing the trend toward higher milk prices. Strong export demand, coupled with steady domestic sales, is currently pulling more product out of stocks, while milk production has been slow to grow recently.

“Nobody knows what the coming year will bring. Producers can choose not to use risk management, but at these historically high prices, that might be more of a gamble than actually doing something to protect your price,” Zepp said.

To access a recording of the conference call in a webinar format, visit www.centerfordairyexcellence.org/protecting-your-profits/.

For more details about the monthly conference call learning series, contact the Center for Dairy Excellence at 717-346-0849 or by email at info<\@>centerfordairyexcellence.org.


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11/23/2014 | Last Updated: 3:15 PM