Dairy Margin Simulation

Welcome to the CIH Q1 Dairy Margin Simulation

Please take a moment to review the objective of this simulation, consult the instructions, and note the simulation rules. During the simulation, you’ll be able to access this information again.

Your Objective

In this simulation you are a dairy producer that needs to manage feed prices and milk sales for one thousand head and 6. 4 million pounds of milk for the FIRST quarter of the year.

Corn Volume Requirement:

Buying 120,000 Bushels (24 contracts)

Contract Coverage Rules
Each of the following strategies equals
5000 Bushels (1 contract) of coverage:

  • 1 Long Futures
  • 1 Long Call Option
  • 1 Long Call Option Spread
  • 1 Short Put Option
  • 1 Long Call Option + 1 Short Put Option
  • 1 Long Call Option Spread + 1 Short Put Option

Soybean Meal Volume Requirement:

Buying 1,200 Tons (12 contracts)

Contract Coverage Rules
Each of the following strategies equals
100 Tons (1 contract) of coverage:

  • 1 Long Futures
  • 1 Long Call Option
  • 1 Long Call Option Spread
  • 1 Short Put Option
  • 1 Long Call Option + 1 Short Put Option
  • 1 Long Call Option Spread + 1 Short Put Option

Milk Volume Requirement:

Selling 6,400,000 Pounds (32 contracts)

Contract Coverage Rules
Each of the following strategies equals
200000 Pounds (1 contract) of coverage:

  • 1 Short Futures
  • 1 Long Put Option
  • 1 Long Put Option Spread
  • 1 Short Call Option
  • 1 Long Put Option + 1 Short Call Option
  • 1 Long Put Option Spread + 1 Short Call Option

Get Started

Press “Go” to start the simulation.