Executive Summary

Dairy Revenue Protection (Dairy-RP) participation figures provided by the USDA Risk Management Agency (RMA) were recently updated with values spanning through the end of the first week of Jan ’22. Highlights from the most recent report include:

• There were 10,707 Dairy-RP policies sold with active endorsements through the week ending Jan 7^th, up 23 from the previous week. Wisconsin led all states in the number of policies sold with active endorsements, followed by Minnesota, California and New York.
• Dairy-RP policies sold through the week ending Jan 7^th have covered a total of 172.2 billion pounds of milk, the equivalent of 25.8% of total 2019-2021 USDA projected milk production volumes. 93.9% of all milk covered has been at the 95% coverage level. California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Jan 7^th, followed by Wisconsin, Texas and Idaho.
• 12-month rolling average Class III Milk volume figures reached a record high level during Jan ’21, prior to declining over much of the past 12 months and remaining near recent 34 month low levels during the week ending Jan 7^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 30 month high level during the week ending Jan 7^th.

Additional Report Details

Policies Sold:

There were 10,707 Dairy-RP policies sold with active endorsements through the week ending Jan 7^th, up 23 from the previous week. The weekly increase in Dairy-RP endorsements finished below previous year seasonal levels for the first time in the past 14 weeks.

Dairy-RP policies have been sold with active endorsements throughout 46 states through the week ending Jan 7^th, led by Wisconsin, Minnesota, California and New York. Wisconsin has accounted for over a quarter of all policies sold with active endorsements through the week ending Jan 7^th.

Pounds Covered:

Approximately 172.2 billion pounds of milk have been covered through the Dairy-RP program through the week ending Jan 7^th, which is the equivalent of 860,900 Class III milk contracts. 93.9% of all milk production covered has been at the 95% coverage level through the week ending Jan 7^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Jan 7^th, followed by Wisconsin, Texas and Idaho. The aforementioned states combined to account for over half of all pounds of milk production covered within the Dairy-RP program.

CME Volume & Open Interest:

CME Class III Milk volume and open interest figures increased substantially following the initial wave of Dairy-RP sign-ups. More recently, 12-month rolling average Class III Milk volume figures reached a record high level during Jan ’21, prior to largely declining over the 12 most recent months of data and remaining near recently experienced 34 month low levels during the week ending Jan 7^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 30 month high level during the week ending Jan 7^th.

Dairy-RP milk production volumes covered through the week ending Jan 7^th were equivalent to 25.8% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Jan 7^th was equivalent to just 0.9% of total 2019-2021 projected production volumes.