Dairy-RP Participation Update – 11/12/18 - Atten Babler Insurance Services

Dairy-RP Participation Update – 11/12/18

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

There were 673 Dairy-RP policies sold through the week ending Nov 9^th, with 208 of the policies having active endorsements. The weekly increases in policies sold and policies with active endorsements were the largest experienced since the initial week of sales. 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 Nov 9^th have covered a total of 2.68 billion pounds of milk, the equivalent of approximately 13,400 Class III milk contracts but just 1.2% of total 2019 USDA projected milk production volumes.4% of all milk covered has been at the 95% coverage level. Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Nov 9^th, accounting for nearly 45% of all covered pounds, followed by Idaho 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, prior to declining but remaining at elevated levels throughout more recent weeks.

Additional Report Details

Policies Sold:

There were 673 Dairy-RP policies sold through the week ending Nov 9^th, up 90 from the previous week. Of the policies sold, 208 had active endorsements through the week ending Nov 9^th, up 56 from the previous week. The weekly increases in both policies sold and policies sold with active endorsements were the largest experienced since the initial week of sales.

Dairy-RP policies have been sold throughout 28 states through the week ending Nov 9^th. Policies with active endorsements have been sold throughout 24 states, led by Wisconsin, Idaho and Michigan. Wisconsin has accounted for over one third of all policies sold with active endorsements through the week ending Nov 9^th.

Pounds Covered:

Approximately 2.68 billion pounds of milk have been covered through the Dairy-RP program through the week ending Nov 9^th, which is the equivalent of approximately 13,400 Class III milk contracts. 99.4% of all milk production covered has been at the 95% coverage level through the week ending Nov 9^th.

Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Nov 9^th, accounting for nearly 45% of all covered pounds, followed by Idaho 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 9^th, reaching 15 and 22 month highs, respectively, through the week ending Oct 26^th, prior to declining but remaining at elevated levels throughout more recent weeks.

Dairy-RP milk production volumes covered through the week ending Nov 9^th are equivalent to just 1.2% of total 2019 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Nov 9^th was equivalent to 2.7% of 2019 projected production volumes.