The Dairy Margin Coverage (DMC) program is must for any dairy risk management plan, along with the Livestock Gross Margin Dairy (LGM-Dairy) program. However, many farmers shy away from LGM because it seems like another cost on dairy farmers that doesn’t deliver.
Farmers who participate would tell you the exact opposite.
LGM-Dairy has a proven track record of being an affordable option for dairy farmers that provides indemnities during low milk prices. There is no denying that the premiums can seem significant, however, dairy farmers who remain committed to their strategy regardless of forecasted market outlooks reap the greatest reward.
As an example, a dairy farmer in central Wisconsin had paid a premium of more than $140,000 over the span of 35 months. Just shy of three years, he made a confident decision referencing the historical market information we provided him, and never looked back. It would have been easy to have questioned his decision, but at the end of those 35 months, not only did he earn enough in indemnities to make up for the premium cost but also to pocket $60,000 during low milk prices.
The financial return on his decision was 33%.
And this type of outcome is very common for dairy farmers that remain dedicated and follow through with their marketing plan. So the only question remains… What’s holding you back?
FarmFirst has partnered with ARM Services LLC to provide resources and expertise on dairy risk management. Whether you are wrapping your head around risk management for the first time or asking questions about a new strategy, we are confident that ARM Services can answer your questions and build a plan that works to meet your goals.