With the 2009 milk prices still fresh on everyone’s mind, there has been increased interest in ways to limit milk price volatility. Using SERF, this paper determined some dairies are willing to pay for limited milk price volatility and found a value they are willing to pay using risk premiums.

USDA released the proposed rule for Federal Milk Marketing Order (EMMO) Consolidation and reform on January 23rd, 1998. The rule met the mandate of the 1996 farm bill to propose a plan to consolidate the number of federal orders. Class I differential and Basic Formula Price (BEP) reform was also...