Library

Dairy Price Risk Management Tools: An Overview for Wisconsin Producers

Leonard Polzin (August, 2026)

Summary

This article explains the main price risk management tools available to Wisconsin dairy producers, including federally subsidized insurance programs and market-based strategies. It describes how Dairy Margin Coverage (DMC), Dairy Revenue Protection (DRP), and Livestock Gross Margin Insurance for Dairy Cattle (LGM-Dairy) protect against different types of milk price and feed cost risk. The article also examines milk futures, options, and forward contracts, explaining their costs, benefits, limitations, and compatibility with federal programs. It outlines factors producers should consider when selecting and combining tools, including farm size, milk pricing, cash flow, and risk tolerance. The resource helps dairy producers make informed decisions to manage market uncertainty and protect farm financial stability.