Dairy Revenue Protection

Dairy Revenue Protection (DRP) is an insurance plan approved by the Federal Crop Insurance Corporation to allow dairy farmers to purchase risk management protection against declines in quarterly revenue from milk sales as a result of a decline in milk prices, a decline in milk production or both. Revenue will be determined by a producer selecting either a class or a component pricing option that uses a combination of Class III and Class IV or milk component prices (butterfat, protein and other milk solids). Coverage will be based on quarterly revenue.

Recent Updates

• DRP will not be sold on days where the monthly USDA Milk Production, Dairy Products and Cold Storage reports are released.
• Sales allowed to be suspended during the sales period for situations that arise during the sales period in which market conditions adversely change after the fact.

Availability

• DRP is available in all counties in all 50 states.
• 2018 Farm Bill provisions allow for dairy operations to participate in both DRP and Farm Service Agency’s Dairy Margin Coverage (DMC) programs.
• DRP allows the insured to have other livestock policies covering milk for the same crop year; however, it cannot cover the same milk in the same months.

Determining Coverage

• The policy is sold on a daily basis and would insure a quarter of milk production. Policies are offered by USDA-approved insurance providers and can be purchased voluntarily for an individual quarter or a series of quarters (up to five quarters out).
• For each SCD, the dairy farmer selects how milk is priced by choosing either 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

Quote Coverage

Quote DRP in the eHarvest® Processing System without having to setup a policy first! Quote DRP now  >

eHarvest is a registered trademark of Hudson Insurance Company, Stamford, Connecticut.

Premium Subsidy

Claims

After the RMA releases the monthly milk and component prices for the quarter and USDA’s milk production report identifies the actual milk production per cow for each state, the state-indexed actual revenue will be compared against the revenue guarantee. If the actual revenue is below the guarantee, the farmer is paid an indemnity based on the difference.

If you have questions or would like more information on this program, please contact info@hudsoncrop.com.

The information contained in this publication is for general purposes only and shall not modify the terms of any insurance policy.