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Livestock Gross Margin-Dairy Insurance: An Assessment of Risk Management and Potential Supply Impacts

Livestock Gross Margin-Dairy Insurance: An Assessment of Risk Management and Potential Supply Impacts

Paperback

Business General

ISBN10: 1505433665
ISBN13: 9781505433661
Publisher: Createspace
Published: Dec 9 2014
Pages: 30
Weight: 0.21
Height: 0.08 Width: 8.50 Depth: 11.00
Language: English
Public risk management policies for dairy producers have the potential to induce expan-sion 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) insur-ance 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.

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Business General