Still Not Ready

November 28, 2011 04:23 AM
 

DonaldVanHofwegenDonald Van Hofwegen
 

Stanfield, Ariz.
Donald and Ingrid Van Hofwegen milk 2,700 Holsteins in central Arizona.

 

 
 


 

Risk management is something I have thought a lot about but have not yet implemented on our dairy. I have done a lot of research on it and am continually talking to people and discussing strategies that may work for me.

I just don’t feel comfortable enough, however, to pull the trigger. I guess the main reason is that I just don’t understand it enough. Along with talking with the professionals in the field, I also have talked to many fellow dairy producers about their experiences with opportunities in protecting margin, and the majority of them don’t do it.

I did, however, speak with a producer back in March of this year, and we talked about hedging and forward contracting. He told me he sold all of his milk and locked in all of his feed for the year and had his profit built in. This would be nice to be able to do, but I just have not found the system that works for me.

I am going to continue to stay close to this, and I am sure that soon I will begin using these tools to keep our business viable in this age of dairying.

It would be nice to hear more from dairy producers about their experiences with hedging—both the good and the bad.



 

Van Hofwegens' November Prices  
Milk (September) (3.5% bf, 3.5% prt) $19.85/cwt. quota
$18.20/cwt. over quota
Cull cows $67/cwt.
Springing heifers $1,600/head
Milk cow hay $290/ton
Rolled corn $298/ton
Cottonseed $320/ton
Bull calves $40/head

 

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