Abstract
Public risk management policies for dairy producers have the potential to induce expansion in milk supplies, which might lower farm-level prices and offset risk-reduction benefits. An evaluation of USDA's Livestock Gross Margin-Dairy (LGM-Dairy) insurance program finds economic downside risk significantly reduced, with potential to induce modest supply expansion (0 to 3 percent) if widely adopted. Supply impacts are likely limited due to relatively low participation levels and a minimal ("inelastic") supply response to risk. LGM-Dairy is more flexible and convenient than other risk management tools, such as hedging directly in futures or options markets, especially for small farms.
| Original language | English |
|---|---|
| Title of host publication | U.S. Dairy Support Programs |
| Subtitle of host publication | Farm Bill Provisions and Gross Margin-Dairy Insurance |
| Pages | 43-74 |
| Number of pages | 32 |
| ISBN (Electronic) | 9781633217515 |
| State | Published - Sep 1 2014 |
Bibliographical note
Publisher Copyright:© 2014 Nova Science Publishers, Inc.
Keywords
- Dairy
- Gross margins
- Insurance
- LGM-Dairy
- Livestock
- Milk supplies
- Risk management
ASJC Scopus subject areas
- General Agricultural and Biological Sciences