Workshop covers milk price outlook


Hello northeast Ohio and northwest Pennsylvania dairy farmers.

The financial crisis has hit our country with a resounding thud. Sadly, it looks like a rough year is ahead for our dairy industry, as the projections for the upcoming year’s milk prices are bleak. It is no secret that 2009 will be a tight year — one in which dairy producers will need to save a nickel here and a dime there to cash flow their operation.


In order for local dairy farmers to learn more about the 2009 milk price outlook, OSU Extension in Ashtabula County will be hosting a milk marketing workshop from 11 a.m. to 2:30 p.m. Feb. 4 at the Ashtabula County Extension office, located at 39 Wall Street in Jefferson, Ohio. This workshop will feature Cameron Thraen, Ohio State University’s Extension dairy economist. This program is a must-attend for dairy producers looking to optimize their dairy income and minimize their risk.

This workshop will allow dairy producers to learn more about our current dairy markets and hear Thraen’s milk market outlook for 2009. This program will also focus on some of the changes to the Market Income Loss Contract program which was established under the 2002 farm bill.

While our 2009 milk price outlook looks bleak, there is some comfort in the reauthorization of the Market Income Loss Contract program and the three key changes contained in the 2008 Farm Bill version of the program. These changes included modification to the Market Income Loss Contract payment rate and per-operation poundage limits as well as the addition of a feed cost adjuster.


During this program, Thraen will share his insight on these changes. If you are currently enrolled in the Market Income Loss Contract program or thinking of enrolling, you will want to hear first hand how these changes may affect you. Producers will learn about the new dairy feed ration cost adjuster which has been incorporated to the Market Income Loss Contract trigger price. They will also hear details on the increase of total eligible pounds to 2.985 million pounds.

Thraen will also provide producers with a Market Income Loss Contract Excel calculator that has incorporated these changes. This program includes a worksheet for Market Income Loss Contract calculations by month for the fiscal year. A producer can use this program to enter average dairy yield, number of cows, and the starting month for Market Income Loss Contract payments. The program will then calculate the anticipated Market Income Loss Contract payments for each month and the anticipated total pay out.

Thraen will also share a worksheet which can be used to calculate the expected or anticipated National Average Dairy Feed Cost ration value, based on the rules for the Market Income Loss Contract program. A producer can enter his expected feed prices (corn, soybean, alfalfa hay) and the worksheet will calculate the National Average Dairy Feed Cost ration value. These values can be used to play a “what-if” game.

Another tool

Another important risk management tool made available to dairy producers in the new farm bill is the Livestock Gross Margin-Dairy insurance product. Participants in this workshop will learn more about this program and gain access to an Excel calculator that allows producers to calculate the expected pay out and premium cost for purchasing a given level of Gross Margin insurance.

The registration fee for this program is $10 per person and includes refreshments, handouts and lunch. Pre-registration for this program is required by Jan. 27. Learn about the dairy markets and the risk management strategies from our new farm bill. If you are interested in this program, contact the Ashtabula County Extension office at 440-576-9008 today. I hope to see many of our dairy producers there.

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