A User's Guide to Buyout Program Decision Aid (BOPDA): A Microcomputer Program for Calculating Breakeven Amounts for the Milk Production Termination Program
Kaiser, Harry M.
This paper describes how to use BOPDA, which is a microcomputer program designed to assist dairy farmers in calculating breakeven amounts for participation in the Milk Production Termination Program (MPTP), which is more commonly known as the dairy buyout program. The term "breakeven amount" refers to that amount (on an annual and five year dollar per hundredweight basis) that would make the farmer as well off under participation in the buyout program as the farmer would be if he/she did not participate in the program. The software consists of a set of worksheets, based on decision aids developed by Casler and Knoblauch (1986), designed to estimate: 1) the impact of enrolling in the buyout program on expenses, receipts, net income, and net worth2) a breakeven amount, based on the farmer’s information, and a range of breakeven amounts, based on various changes in the producer 0 s total expense and milk price projectionsand 3) annual cash flow comparisons with and without participation in the buyout program .. Users of BOPDA are strongly encouraged to obtain copies of other materials prepared by the National Dairy Herd Extension Program Committee prior to using the software. An understanding of the information contained in these publications is essential for making a better decision regarding 1) whether or not to submit a bid for the program, and 2) what to consider in formulating the bid to be submitted.
A.E. Ext. 86-06
Charles H. Dyson School of Applied Economics and Management, Cornell University