Input is sought on a proposed revenue protection insurance for the dairy industry that would provide better risk management for dairy farmers. A proposal submitted to the Federal Crop Insurance Corporation by AFBF, American Farm Bureau Insurance Services and others would provide a revenue-based insurance option for dairy farmers that is different from the current margin-based insurance options available. Dr. John Newton, AFBF’s director of market intelligence, explained in a recent Newsline how the Dairy Revenue Protection insurance concept will work for dairy farmers.
The proposal would allow farmers to insure the revenue from sales of milk during a particular quarter. “They would use futures market prices and expected production to identify an expected revenue, and then purchase insurance protection on that expected revenue,” Newton said. “If the actual revenue happened to fall below that guarantee, a farmer would receive an indemnity.”
Dairy farmers can learn more about the proposal and provide their comments at www.farmbureausellscropinsurance.com.