Reviewing Dairy Revenue Insurance Participation

Reviewing Dairy Revenue Insurance Participation

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.