Dairy Futures and Options Tutorial

Managing Price Risk

A Tutorial in Dairy Futures and Options

The material contained in these pages provide an introduction in the use of dairy-based futures and options for managing price risk. This material will be useful for dairy farm operators, dairy processors and users of dairy-based ingrediants who want to reduce their price risk.

Throughout this workbook, you can choose from a number of interactive tutorials to hopefully provide a better understanding of the concepts. If after working through these exercises, you continue to have questions, feel free to contact Prof. Brian W. Gould of the Department of Agricultural and Applied Economics for further information.

Throughout the tutorial there are graphical representations of important concepts. You will need an Adobe Acrobat Reader to view these images. If you do not have a PDF reader, you can download a free reader/from Adobe by clicking on the following:

In several sections of this tutorial you have the opportunity to work through examples illustrating the principles behind the use of futures and options. There are several rules which must be followed when inputting values: