Dairy-RP Participation Update – 10/29/18

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

• There were 510 Dairy-RP policies sold through the week ending Oct 26^th, with 122 of the policies having active endorsements. Wisconsin led all states in the number of policies sold with active endorsements, followed by Idaho and Michigan.
• Dairy-RP policies sold through the week ending Oct 26^th have covered a total of 1.34 billion pounds of milk, the equivalent of approximately 6,700 Class III milk contracts but just 0.6% of total 2019 USDA projected milk production volumes.7% of all milk covered has been at the 95% coverage level. Idaho has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Oct 26^th, followed by Wisconsin and California.
• CME Class III Milk open interest and volume figures have increased substantially since Dairy-RP sign-ups began on Oct 9^th, reaching 15 and 22 month highs, respectively, through the week ending Oct 26^th.

Additional Report Details

Policies Sold:

There were 510 Dairy-RP policies sold through the week ending Oct 26^th, up 66 from the previous week. Of the policies sold, 122 had active endorsements through the week ending Oct 26^th, up 33 from the previous week.

Dairy-RP policies have been sold throughout 28 states through the week ending Oct 26^th. Policies with active endorsements have been sold throughout 18 states, led by Wisconsin, Idaho and Michigan. Wisconsin has accounted for nearly one third of all policies sold with active endorsements through the week ending Oct 26^th.

Pounds Covered:

Over 1.34 billion pounds of milk have been covered through the Dairy-RP program through the week ending Oct 26^th, which is the equivalent of approximately 6,700 Class III milk contracts. 99.7% of all milk production covered has been at the 95% coverage level through the week ending Oct 26^th.

Idaho has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Oct 26^th, followed by Wisconsin and California.

CME Volume & Open Interest:

CME Class III Milk open interest and volume figures have increased substantially since Dairy-RP sign-ups began on Oct 9th, reaching 15 and 22 month highs, respectively, through the week ending Oct 26^th.

Dairy-RP milk production volumes covered through the week ending Oct 26^th are equivalent to just 0.6% of total 2019 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Oct 26^th was equivalent to 2.7% of 2019 projected production volumes.