Therefore, dairy producers may want to consider protecting some of these prices for their future milk production by either hedging or cash forward contracting. So hedging or cash forward contracting may be preferred over options recognizing that if prices increase further, the producer forgoes this increase. This is very possible, but unless weather knocks down milk production, it is hard to forecast prices being better than what the futures market is now offering. History tell us that prices can drop quickly and far. The saying stands, one cannot go broke making a profit.
Futures prices are in the historical high range for distant months, ignoring last year's records.
Copyright 1999, Contact MooMilk , Produced by Isys Idea Systems, Inc.