Evaluation of Dairy Options Pilot Program

The primary objective of the study is to develop information on the performance of the Dairy Options Pilot Program to assist policy makers considering the future of this program. This information will include the context for DOPP (cUlTentand recent dairy market conditions and policy regimes); DOPP's origins and implementa~ion; and DOPP's performance and efficacy in achieving possible policy goals. ERS analysis will include: 1. a review of the dairy industry with particular focus on raw milk markets and milk price variability; 2. a conceptual discussion of dairy futures options and their efficacy in reducing price risk for dairy producers; 3. a review ofDOPP's goals, general design, and how RMA implemented the program; 4. analysis of farmer participation in DOPP, including farmer characteristics and market conditions that may have affected farmer participation; 5. a discussion of possible dairy policy goals related to risk management; 6. analysis of how goals may be realized by extending, modifying, or eliminating DOPP.