In the ST Talks podcast episode, Laura Demer explores the topic of milk hedging with Pat Carroll, a partner at Geno Source, a 5,000 cow dairy, and Mike Merucci, head of the Dairy Division for RCM Ag Services.
Mike Merucci underscores the necessity for dairy producers to establish a risk management plan, understand their production costs, and align long term goals. He highlights the advantages of insurance products like Dairy Revenue Protection (DRP), especially for those less familiar with futures and options trading.
Pat continues by emphasizing the significance of starting slowly in milk hedging, gradually increasing involvement as your understanding deepens. Carroll discusses the strategy of using DRP to reduce the overall cost of protecting milk, including additional methods like selling calls to finance DRP purchases.
Mike further stresses the importance of ongoing conversations with clients, adapting strategies to changing market conditions, and the need for producers to revisit and adjust plans over time. Those interested in learning more about milk hedging and risk management can reach Mike at his website mmumanagement.com.
Check out the full interview below.