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3. 2024 Extension Risk Management Education National Conference

Managing Milk Prices Using the Futures Market

Gonzalo Ferreira

Summary

The number of dairy farms in the Southern region has decreased dramatically in the last decade, and limited marketing and financial skills might contribute to such decrease. Small dairy farmers are reluctant to hedge prices in the futures market and there are at least two reasons for this. First, small dairy farmers might not understand how the futures market works. Second, small dairy farmers might (erroneously) believe that hedging is only for large-scale farms. For this project, we delivered seven educational workshops and two webinars to dairy farmers, Extension educators, dairy industry personnel, and other stakeholders, totaling 227 attendees. The workshop described the principles of hedging through real-life examples and actual simulations of the hedging process. We complemented all this with real cases of the dairy industry. In addition, we developed an e-learning module to perpetuate the workshop and make it freely available to any stakeholder requesting it. If interested, stakeholders can request access to the course "Managing Milk Prices Using the Futures Market" by emailing dairymanagementvt@gmail.com and requesting login credentials. Since its launching in early November, 37 attendees requested the e-learning module. The interaction with the audience was outstanding. We are convinced this program was a success. We have been delivering hands-on educational programs for several years now. However, there was something exceptional about this one, and that was the interaction and engagement. People were surprisingly engaged and very interactive. Truly a "more than expected" result!

Details

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