USDA rolls out new dairy insurance plan

Sign-ups for the new Dairy Revenue Protection plan (Dairy-RP) begins Oct. 9, with the first available coverage starting the first quarter of 2019. Dairy-RP was developed by American Farm Bureau Federation, American Farm Bureau Insurance Services and other collaborators and was approved by the Federal Crop Insurance Corp., John Newton, AFBF director of market intelligence told Capital Press in a recent interview.The insurance plan is different from other USDA risk programs for dairy, which focus on income over the cost of feed and don’t directly manage revenue risk. It provides insurance for the difference between the final revenue guarantee selected by producers and actual milk revenue if prices fall. It will function similar to crop revenue protection policies in that the revenue guarantee would be based on futures prices, expected production and market-implied risks, Newton said. A dairy producer can decide the value of milk protected either based on a combination of Class III and Class IV milk prices or component milk prices for butterfat, protein and other solids.