What is Dairy- RP?
Dairy Revenue Protection (Dairy-RP) is a product designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level.
Dairy Revenue Protection (Dairy-RP) is a product designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level.
How Dairy- RP Works
As a dairy producer you have 5 main decisions to make when electing to take advantage of coverage:
1.) Class vs. Component Pricing
-Class Pricing: The Class Pricing Option uses an insured's election of a combination of Class III and Class IV milk prices as a basis for determining coverage and indemnities.
-Component Pricing: The Component Pricing Option uses the component milk prices for butterfat, protein, and other solids as a basis for determining coverage and indemnities.
2.) The amount of milk production (CWT) to cover for the elected quarter
3.) The level of coverage
-You may cover 80 percent to 95 percent of your expected quarterly revenue in five percent increments.
4.) Which quarters you want to insure (Quarterly Endorsement)
-The Quarterly Coverage Endorsements correspond to the eight quarterly insurance periods available for purchase during the crop year. Producers may purchase coverage up to five nearby quarters and have multiple endorsements for the same quarterly insurance period.
5.) Protection Factor
As a dairy producer you have 5 main decisions to make when electing to take advantage of coverage:
1.) Class vs. Component Pricing
-Class Pricing: The Class Pricing Option uses an insured's election of a combination of Class III and Class IV milk prices as a basis for determining coverage and indemnities.
-Component Pricing: The Component Pricing Option uses the component milk prices for butterfat, protein, and other solids as a basis for determining coverage and indemnities.
2.) The amount of milk production (CWT) to cover for the elected quarter
3.) The level of coverage
-You may cover 80 percent to 95 percent of your expected quarterly revenue in five percent increments.
4.) Which quarters you want to insure (Quarterly Endorsement)
-The Quarterly Coverage Endorsements correspond to the eight quarterly insurance periods available for purchase during the crop year. Producers may purchase coverage up to five nearby quarters and have multiple endorsements for the same quarterly insurance period.
5.) Protection Factor
Calculation of Indemnity
-The 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.
-Dairy-RP provides insurance only for the difference between the final revenue guarantee and actual milk revenue multiplied by actual share and protection factor, caused by natural occurrences in market prices and yields in the pooled production region.
-The 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.
-Dairy-RP provides insurance only for the difference between the final revenue guarantee and actual milk revenue multiplied by actual share and protection factor, caused by natural occurrences in market prices and yields in the pooled production region.
*Disclaimers:
-This product is NOT a form of livestock mortality insurance and does not cover the death, loss or destruction of dairy cattle
-Information provided by UDSA RMA
-Any questions regarding a Dairy- RP policy please contact us to learn more
-This product is NOT a form of livestock mortality insurance and does not cover the death, loss or destruction of dairy cattle
-Information provided by UDSA RMA
-Any questions regarding a Dairy- RP policy please contact us to learn more