Agricultural Economics Department


Date of this Version



Cornhusker Economics, August 18, 1999,


Copyright 1999 University of Nebraska.


Dairy producers are more prone to production, marketing and financial risks than ever because they have few marketing alternatives, despite the highly volatile milk prices. Considering the precarious situation that dairy farmers face, USDA's Risk Management Agency (RMA) has launched a novel costshare program in select states and counties across the nation that allows farmers to try and use futures and options markets. The program, Dairy Options Pilot Program (DOPP), at a cost of $11 million is a first of its kind. Launched under the 1996 FAIR Act, it was first announced on June 8, 1998 by the Secretary of Agriculture, Dan Glickman. The program helps dairy producers to create their own financial safety net by purchasing exchange-traded options on the price of their milk.