Financial And Risk Management
Dairy Revenue Protection provides protection against an unexpected decline in quarterly revenue from milk sales. The policy covers the difference between your final revenue guarantee and actual milk revenue during each quarter of the year. The final revenue guarantee is based on the expected yield multiplied by the expected price and the coverage level. Expected milk yields are based on state-level National Agricultural Statistics Service estimates of milk production per cow by region. The default option for milk price will be the futures price however other options will allow producers to insure the price for milk components such as protein and butterfat.
Dairy RP is available for purchase every business day beginning October 9th when the coverage prices and rates are published on RMA’s site. You can fill out an application at any time but coverage does not attach until you buy a quarterly coverage endorsement. If you think this policy could benefit your operation please reach out to FARM Inc. to discuss the policy in more detail.