Writing an article about how to hedge against the rising price of Class III milk during one of the biggest bull markets in milk's history is kind of like telling you not to smoke in bed as we stand outside your burning house; its advice not well received. Nevertheless, times like these may be the best time to discover tools you can used to protect against rising costs in the future. One tool that conjures up memories of Algebra class - and gets very little press because of that fact - is Call Options. Call options allow milk and cheese buyers to take an active role in the price they pay for their milk, without limiting downside potential. What’s the catch? There is no “catch”. There are simply guidelines and rules for using call options effectively. And there are only certain times – under certain market conditions - when buying call options is a viable strategy to hedge milk purchases.