Risk Management Agency Program Announcement
DAIRY OPTIONS PILOT PROGRAM EXPANDED
Contact: Eric Edgington (202) 690-2539
Eric.Edgington@rma.usda.gov
WASHINGTON, Mar 7, 2000 - Risk Management Agency (RMA) Administrator Ken Ackerman today announced dairy producers in 61 counties are now eligible for training and cost sharing under the Dairy Options Pilot Program (DOPP). In addition to providing a free workshop on using price risk management tools, USDA pays 80 percent of the premium for a "put option" and $30 towards a "round turn" brokerage commission for each option purchased.
"We"re committed to giving producers the tools they need to manage risk," said Ackerman. "The recent Milk Marketing Order Reform, which makes dairy pricing more responsive to economic signals, should make DOPP training even more valuable to dairy producers."
Greater flexibility has been built into the second round. Producers are encouraged to buy up to 600,000 pounds of milk options in the 4 months following training, instead of the 2 months allowed in the original program. After training, participants can now buy put options 12 months out instead of the original 6 months.
A unique aspect of the program is the continuing counseling and advice available during the 12-month duration of the program. This hedging alternative can protect a producer's income if the market price falls below the put option price. If market price exceeds the put option price, the options can expire unused.
The second round of training will be provided in the following 61 counties in 32 states.
- Arizona: Maricopa
- California: Marin and Sonoma
- Colorado: Weld
- Florida: Okeechobee and Gilchrist
- Georgia: Putnam and Morgan
- Idaho: Jerome, Gooding, and Twin Falls
- Illinois: Clinton and Washington
- Indiana: Elkhart and Marshall
- Iowa: Clayton, Dubuque, and Winneshiek
- Kansas: Nemaha
- Kentucky: Barren and Adair
- Maryland: Frederick and Carroll
- Massachusetts: Franklin
- Michigan: Sanilac, Allegan, and Clinton
- Minnesota: Wabasha and Fillmore
- Missouri: Wright and Webster
- Nebraska: Gage
- New Mexico: Chaves, Roosevelt, and Lea
- New York: Wyoming and Madison
- North Carolina: Iredell
- Ohio: Wayne, Mercer, and Ashtabula
- Oklahoma: Adair and Mayes
- Oregon: Marion and Washington
- Pennsylvania: Lebanon and Tioga
- South Dakota: Deuel and Grant
- Tennessee: McMinn
- Texas: Archer
- Utah: Cache and Utah
- Vermont: Washington
- Virginia: Franklin and Rockingham
- Washington: Whatcom, Skagit, and Snohomish
- Wisconsin: Barron and Shawano
Developed by the Risk Management Agency, the program has worked particularly well due to partnerships with the Cooperative State Research, Education, and Extension Service; dairy industry groups at the state and county levels; and the New York Board of Trade and the Chicago Mercantile Exchange.
If you would like more information about the second round of DOPP, contact Lon Burke at (202) 720-5265, or e-mail: Lon.Burke@rma.usda.gov. DOPP Information is also available at: /pilots/dopp.html | 
