Risk Perceptions and Management Responses of Arizona Dairy Producers

Dairy producers make decisions based on their perceptions and understanding of their economic and social environment. A survey of Arizona dairy producers was conducted to gather data on their risk perceptions and management responses. Risk or variability associated with production inputs (feed, labor, credit) was perceived to be as important to these producers as fluctuating milk prices and milk production of cows. Producers respond to these perceptions in a logical fashion by using management tools that assist in reducing this variability (e.g., forward contracting of feed). Although generalizations can be made about the risk perceptions and management responses of the Arizona dairy sector as a whole, attempts to categorize individual producers into risk-related groups based on socioeconomic variables were not successful.