On August 8, USDA announced a new insurance plan for dairy producers that protects against unexpected declines in quarterly milk sales. This program is provided through USDA’s Risk Management Agency (RMA) and provides insurance for the difference between the revenue guarantee and actual milk revenue if prices fall.
It was developed and approved through the Federal Crop Insurance Act’s 508(h) process, which allows private parties to develop insurance plans that best fit the interests of producers. The Dairy Revenue Protection Plan also provides more choices for prices, ranging from cheese to fresh milk, protein or butterfat. Available coverage levels are between 70 and 95 percent of revenue.
In a challenging farm economy, it’s important to protect producers from any industry shocks.
“Expanding the federal crop insurance program to markets that need it is key to an effective farm safety net,” says Billy Northey, Under Secretary, Farm Production and Conservation.
Producers interested in purchasing Dairy Revenue Protection should contact an agent selling on behalf of an approved insurance provider. A list of crop insurance agents can be found here.
Land O’Lakes encourages members to utilize this risk management tool to strengthen their business. For more information about crop insurance other risk management tools, go here.