In The News
Options for Margin Management
by Chip Whalen, Progressive Dairyman, May 1, 2010
Since the last time we explored forward dairy production margins in the February 9 edition, much has changed in the market both for milk prices and feed costs. On a positive note, feed costs have held steady and are under fundamental pressure from larger crop estimates out of South America, as well as indications that acreage will be higher in the U.S. this spring. Moreover, domestic demand over the past quarter has not been as strong as previously expected. Unfortunately, milk prices have dropped sharply since mid-January, more than offsetting all of the benefit gained from steady to cheaper feed prices…Read Complete Article »
Manage the Margin to Protect Profitability
by Chip Whalen, Progressive Dairyman, February 9, 2010
The volatility in both milk and grain futures has no doubt been unsettling for many dairy producers worrying about their profitability this year following what has been a very challenging time in the industry the past two years. Fortunately, the recent movement in prices represents an excellent opportunity to take advantage of forward profit margins that have improved significantly as a result of both lower feed costs as well as higher values for milk. Looking at the Figure 1 of nearby profit margins for first quarter 2010, you can see that current profits of around $0.43 per hundredweight…Read Complete Article »
Dairy Margin Outlook and Strategic Risk Management in 2010
by Chip Whalen, Progressive Dairyman, November 2, 2009
There has been much talk about the lack of profitability among dairy producers lately, with milk prices below most operators’ cost of production. The negative profit margins have certainly put quite a bit of strain on the industry for the past year and led to a new round of the CWT’s herd retirement program in an effort to further reduce production and boost prices. What is lost in this discussion is the fact that profitable margins for all of this year could have been locked in well ahead of when profitability began to deteriorate during Q4 2008. Before looking at these opportunities, let’s take a step back and explore the concept of a dairy producer’s profit margin first…Read Complete Article »
CIH Opens New Des Moines Office
Business Wire, October 1, 2009
Commodity and Ingredient Hedging, LLC (CIH), a provider of commodity price and margin management consulting services, today announced a new office located in West Des Moines, Iowa. Starting October 1, CIH will be open for business at 4401 Westown Parkway, with a team that combines expertise from Iowa and consultants from the company’s current headquarters in Chicago… Read Complete Article »
NU Picks CIH For Risk Management Expertise
Star Tribune, September 24, 2009
CIH today announced a collaboration with Northwestern University’s School of Continuing Studies to instruct a course on managing risk through hedging. The four-week course, entitled “Basics of Hedging Using Futures and Options”… Read Complete Article »
Could a profit margin for this winter still be available?
by Chip Whalen, Progressive Dairyman, July 21, 2009
The concept of a margin is not new. Simply put, revenues minus expenses equal the operating margin of a business. Many dairies do not look at their enterprise in margin terms. We assert that following a margin approach can significantly improve your dairy’s profitability and help your business through the inevitable lean times, such as we are experiencing right now, that are part of any cyclical industry… Read Complete Article »
Commodity and Ingredient Hedging Releases Upgrade to
Dairy Margin Management Service
CBS 2 Chicago, June 3, 2009
Commodity and Ingredient Hedging, LLC (CIH), a provider of commodity price and margin management consulting services, today announced the release of a significant upgrade to its Dairy Margin Management web site. The web site plays an important role in CIH’s comprehensive consulting service designed to help U.S. milk producers manage profit margins…. Read Complete Article »
Amid Swine Flu Fears, the Pork Market Falls III
by Ari J. Officer, TIME, May 5, 2009
Swine flu, recently renamed H1N1 virus, is causing a swoon in pork prices. The Lean Hogs futures contract, traded on the Chicago Mercantile Exchange (CME), is down more than 10% since news of the potentially imminent pandemic first broke. The CME’s Frozen Pork Bellies futures contract has suffered comparable losses… Read Complete Article »
Making Money in a Down Market
by Joe Vansickle, Senior Editor, National Hog Farmer, March 15, 2009
Without a risk management program, the Becker family of Fairmont, MN, admits they wouldn’t have made money on hogs in 2008. “The last couple of years, our risk management program has made our production enterprise profitable. Because the cash market for hogs has been so lousy the last couple of winters, and we protected a profitable margin in our hedge account, the hedges more than offset our losses on the production side,” says Lynn Becker, past president of the Minnesota Pork Board… Read Complete Article »
An Interview with David Ward, Senior Risk Manager
by Dave Russell, Brownfield Network, November 19, 2008
Dave Russell talks with David Ward, Sr. Risk Manager for Commodity & Ingredient Hedging, LLC in Chicago about helping producers and companies manage risk…. Listen »
Customized Program Manages Pork Profits
by Joe Vansickle, Senior Editor, National Hog Farmer, April 15, 2002
Usually, pork producers excel at production. Seldom do they take the same amount of time or resources to track and manage their operation’s overall profitability. They often find themselves at the mercy of suppliers or packers with little room to negotiate their financial position…. Read Complete Article »
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