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 second week of October. Highlights from the most recent report include:

• There were 7,050 Dairy-RP policies sold with active endorsements through the week ending Oct 9^th, up 64 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 9^th have covered a total of 106.7 billion pounds of milk, the equivalent of 16.0% of total 2019-2021 USDA projected milk production volumes. 95.0% 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 9^th, followed by Wisconsin, Idaho and Texas.
• 12-month rolling average Class III Milk volume figures reached a record high level during the first week of September, prior to declining over more recent weeks of data. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20 but declined to a nine week low level.

Additional Report Details

Policies Sold:

There were 7,050 Dairy-RP policies sold with active endorsements through the week ending Oct 9^th, up 64 from the previous week. The increase in Dairy-RP endorsements remained below historical average levels for the third consecutive week.

Dairy-RP policies have been sold throughout 46 states through the week ending Oct 9^th. Policies with active endorsements have been sold throughout 45 states, led by Wisconsin, Minnesota, California and Michigan. Wisconsin has accounted for nearly 30% of all policies sold with active endorsements through the week ending Oct 9^th.

Pounds Covered:

Approximately 106.7 billion pounds of milk have been covered through the Dairy-RP program through the week ending Oct 9^th, which is the equivalent of 533,300 Class III milk contracts. The Oct 9^th weekly increase in pounds covered was the largest experienced throughout the past 17 weeks. 95.0% of all milk production covered has been at the 95% coverage level through the week ending Oct 9^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Oct 9^th, followed by Wisconsin, Idaho and Texas. 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 the first week of September, prior to declining over more recent weeks of data. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20 but declined to a nine week low level during the week ending Oct 9^th.

Dairy-RP milk production volumes covered through the week ending Oct 9^th were equivalent to 16.0% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Oct 9^th was equivalent to just 0.6% of total 2019-2021 projected production volumes.