Revenue will be determined by a producer selecting to base their coverage on a mix of Class III and Class IV milk prices or milk components (milkfat, protein, and other milk solids). Coverage will be based on quarterly revenue.

DRP expected revenue is based on futures prices for milk and dairy commodities and the amount of covered milk production elected by the dairy producer. The covered milk production is indexed to the state or region where the dairy producer is located.

The policy will be sold on a daily basis and would insure a quarter of milk production. Policies would be offered by USDA-approved insurance providers and could be purchased voluntarily for an individual quarter, or a strip of quarters, up to five quarters out. For each Sales Closing Date, the Dairy farmer selects how milk is priced by either choosing the milk class price option and/or milk component price option, the coverage level (80-95% of the expected revenue) and the quarterly time frame. The revenue guarantee is based on future milk prices and declared covered milk production. The price of the policy varies daily based on the farmer-selected parameters on the expected risk in the market.

Recent Updates

• DRP will not be sold on days where the monthly USDA Milk Production, Dairy Products, and Cold Storage reports are released.
• Milk or dairy commodity prices that experience a limit up or down move in the futures markets will not be available for determining the quarterly expected revenue.
• Allow sales to be suspended during the sales period for situations that arise during the sales period in which market conditions adversely change after the fact.