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 Oct ’21. Highlights from the most recent report include:

• There were 9,300 Dairy-RP policies sold with active endorsements through the week ending Oct 8^th, up 95 from the previous week. Wisconsin led all states in the number of policies sold with active endorsements, followed by Minnesota, California and Michigan.
• Dairy-RP policies sold through the week ending Oct 8^th have covered a total of 154.8 billion pounds of milk, the equivalent of 23.1% of total 2019-2021 USDA projected milk production volumes. 93.5% 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 Oct 8^th Wisconsin, Texas and Idaho.
• 12-month rolling average Class III Milk volume figures reached a record high level during Jan ’21, prior to remaining near recently experienced two year low levels during the week ending Oct 8^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 23 month high level during the week ending Oct 8^th.

Additional Report Details

Policies Sold:

There were 9,300 Dairy-RP policies sold with active endorsements through the week ending Oct 8^th, up 95 from the previous week. The weekly increase in Dairy-RP endorsements was the largest experienced throughout the past nine months, finishing above previous year seasonal levels for only the second time in the past 25 weeks.

Dairy-RP policies have been sold throughout 46 states through the week ending Oct 8^th. Policies with active endorsements have been sold throughout 45 states, led by Wisconsin, Minnesota, California and Michigan. Wisconsin has accounted for over a quarter of all policies sold with active endorsements through the week ending Oct 8^th.

Pounds Covered:

Approximately 154.8 billion pounds of milk have been covered through the Dairy-RP program through the week ending Oct 8^th, which is the equivalent of 774,000 Class III milk contracts. 93.5% of all milk production covered has been at the 95% coverage level through the week ending Oct 8^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Oct 8^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 declining over the eight most recent months of data and remaining near recently experienced two year low levels during the week ending Oct 8^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 23 month high level during the week ending Oct 8^th.

Dairy-RP milk production volumes covered through the week ending Oct 8^th were equivalent to 23.1% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Oct 8^th was equivalent to just 0.8% of total 2019-2021 projected production volumes.