Dairy Revenue Protection

Dairy Revenue Protection

Dairy Revenue Protection (Dairy-RP) is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level.

The expected revenue is based on futures prices for milk and dairy commodities and the amount of covered milk production elected by the dairy producer.

Availability Dairy-RP is approved for sale in all counties in all 50 states.

Pricing Options Dairy-RP offers two revenue pricing options:

  • The Class Pricing Option uses a combination of Class III and Class IV milk prices as a basis for determining coverage and indemnities.
  • The Component Pricing Option uses the component milk prices for butterfat, protein and other solids as a basis for determining coverage and indemnities. You may select the butterfat and protein test percentages to establish your insured milk price.

 

Coverage Levels and Premium Subsidies You may cover 70% to 95% of your expected quarterly revenue in five percent increments. A premium subsidy is available and is based on the coverage level selected.

Coverage Level Percent  70 75  80  85  90  95 
Premium Subsidy Percent 59 55 55 49 44 44

Establishing Coverage Coverage is established by adding quarterly coverage endorsements to the policy. Dairy-RP will not be sold on days where the monthly USDA Milk Production, Dairy Products, and Cold Storage reports are released.

Quarterly Coverage Endorsement This corresponds to the eight quarterly insurance periods available for purchase during the crop year. Producers may purchase coverage up to five nearby quarters and have multiple endorsements for the same quarterly insurance period.

Ending Milk Prices and Yield The actual ending milk or component values are based upon the monthly average prices announced by USDA’s Agricultural Marketing Service.

Cause of Loss Dairy –RP provides insurance only for the difference between the final revenue guarantee and actual milk revenue, times actual share and protection factor, caused by natural occurrences in market prices and yield in the pooled production region. It does not insure against death of dairy cattle, other loss or destruction of dairy cattle, or any other loss or damage.

Quarterly Insurance Period The quarterly insurance period contains the three-month periods corresponding to one of eight quarters for which coverage is available under the quarterly coverage endorsement.

Buying a Policy You must buy Dairy-RP through an authorized crop insurance agent. Your coverage starts the day you buy a quarterly coverage endorsement.

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