Dairy producers and manufacturers today face many challenges in operations and in marketing. Dairy prices fluctuate from month to month and make it difficult to ensure meeting break-even costs. Dairy futures and options, however, serve as useful tools for managing the risks inherent to the dairy industry. Options on Dairy futures, in particular, allow producers and manufacturers to limit their price risks, while leaving open the door for profit potential. These markets also attract traders who are willing to accept the risk, in return for potential profits, that dairy professionals seek to transfer.