forward contract milk

Asked March 10, 2014, 4:49 PM EDT

Beginning Dairy Farmer seeking help in learning how forward contract milk. I have some basic knowledge but haven't done anything since college 10 years ago.
Thank You for any information

Huron County Michigan dairy cattle farm management farm marketing

2 Responses

You might want to look at the web site below. It explains much of the questions you might have. I am not advocating DFA but just using the web site as a resource.
http://www.dfariskmanagement.com/forward-contract-types

You can forward cash contract milk with most any dairy marketing cooperative. However if your milk were to go to a private company located in a federal milk marketing order (FMMO), they are not able to offer cash forward contracting now. You may contract at a milk price below what the actual milk price turns out to be. Private dairy processors are required to pay at least the minimum prices that are calculated by the FMMO. A coop is thought to be owned by the members and thus they are paying themselves.

Thank you for your response, it was a great help.