Dr. Jennifer Ifft and Jerzy Jaromczyk Cornell University
There are many options for dairy farms to manage milk price, feed price, and production risk. RMA recently announced a new insurance product, Dairy Revenue Protection (Dairy-RP). Below are a few reasons why farms may want to consider learning more about Dairy-RP.
- Dairy RP provides protection against revenue decline due to either unexpected price or state or regional level milk yield declines.
- Flexible price protection: producers have either a class pricing option (Class III and IV) or a component pricing option. Prices used for the final revenue guarantee are based on USDA Agricultural Marketing Service monthly average prices.
- Milk yield protection: Dairy RP provides protection against state or regional level milk yield declines (as estimated by NASS).
- Purchased quarterly: coverage levels and protection factors can be changed for each 3 month coverage period.
- Dairy RP and LGM Dairy can be used by the same farm in the same crop year (July 1 – June 30), but not in the same quarter.
- Farms can participate in Dairy RP and MPP (Margin Protection Program) at the same time.
- Protection can be purchased for up to 15 continuous months (5 quarters).
- Coverage levels range from 70 – 95% in 5% increments and premium subsides range from 44 – 59%. Producers select a protection factor between 1.00 and 1.5 in 0.05 increments.
- Qualifying beginning farmers or ranchers can receive an additional 10 percent of premium subsidy.
- Like other crop insurance policies, Dairy-RP can be purchased from a local crop insurance agent. To learn more about Dairy RP, take a look RMA’s livestock policy webpage, which has an FAQ, fact sheet and other details on Dairy-RP: https://www.rma.usda.gov/livestock/