Dairy Revenue Over Feed

What is Dairy Revenue Over Feed?

Dairy Revenue Over Feed is an efficient hedging program we developed to help dairy producers manage their risk. It takes the main drivers of margins in milk production, the cost of feed and the price of milk, and distills it into one easy to hedge number. 

Why hedge using Dairy Revenue Over Feed?

Revenue Over Feed allows enrolled producers to take control of their risk without having to individually manage the corn, soybean, and milk markets. Ag Hedge Desk developed a formula that calculates Dairy Profitability with the factors mentioned above, milk price and feed costs. This formula equals a number we called “Revenue Over Feed.” Ag Hedge Desk then hedges those costs for the producer, effectively helping manage risk and protect the producer in a dairy market that is more volatile than ever before. Additionally, Revenue Over Feed is completely compatible with government insurance programs like Dairy Margin Coverage or Dairy Revenue Protection to further manage a dairy’s risk.

Revenue Over Feed and Revenue Over Feed Lite:

Ag Hedge Desk offers two version of of the Revenue Over Feed Program:

  1.  Revenue Over Feed, for producers that purchase all of their feed. The formula used to calculate ROF is: milk – corn – soy meal = ROF
  2. Revenue Over Feed Lite – In the Midwest, many producers grow their own silage and forages. This program only hedges only soybean meal for the feed component  of Revenue Over Feed so the formula accurately represents a producers revenue. The formula for ROFL is: milk – soybean meal = ROFL.

How is Revenue Over Feed offered? 

Dairies of all sizes and locations are able to enroll in Revenue Over Feed. We’ve work with both co-ops and individual farms and can tailor our program to meet a variety of needs. If you’re interested in enrolling or would like to know more, contact us.