It has been slightly more than one month since Dairy Revenue Protection was made available to dairy farmers on Oct. 9. Dairy-RP is an area-based quarterly insurance policy designed to protect against declines in the revenue from milk sales.
Unlike previous dairy farm safety net programs, Dairy-RP is administered by the Agriculture Department’s Risk Management Agency and dairy farmers may purchase Dairy-RP from a licensed crop insurance agent. In large part due to the wide network of agents licensed to deliver Dairy-RP, as well as the milk pricing expertise found in the cooperative and brokerage spaces, farmers have quickly adopted Dairy-RP as a risk management tool – with approximately 5 percent of the 2019 first quarter milk supply covered by Dairy-RP.
RMA’s Summary of Business report indicates that during the first month of availability 673 policies and more than 200 endorsements were purchased by dairy farmers (endorsements are quarters covered on a policy). These endorsements represented 2.7 billion pounds of milk covered in the first month. On average, each Dairy-RP endorsement is covering 13 million pounds, or slightly more than 4.2 million pounds per month of the quarter.