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 3,797 Dairy-RP policies sold with active endorsements through the week ending Nov 15th, up 41 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 Nov 15th have covered a total of 51.96 billion pounds of milk, the equivalent of 11.8% of total 2019-2020 USDA projected milk production volumes. 93.8% of all milk covered has been at the 95% coverage level. California and Wisconsin have led all states in pounds of milk production covered within the Dairy-RP program through the week ending Nov 15th, followed by Idaho and Minnesota.
- CME Class III Milk volume and open interest figures increased substantially following the initial wave of Dairy-RP sign-ups. CME Class III Milk volume figures trended back towards levels experienced prior to Dairy-RP sign-ups until increasing to a 33 month high level during the third week of September and the second highest level experienced throughout the same period during the week ending Nov 1st. Class III Milk open interest figures declined to a nine year low during the first week of August, prior to rebounding over more recent weeks of data.
Additional Report Details
Policies Sold:
There were 3,797 Dairy-RP policies sold with active endorsements through the week ending Nov 15th, up 41 from the previous week. The increase in Dairy-RP endorsements was the smallest experienced throughout the past three weeks, finishing below historical average figures.
Dairy-RP policies have been sold throughout 45 states through the week ending Nov 15th. Policies with active endorsements have been sold throughout 40 states, led by Wisconsin, Minnesota, California and Michigan. Wisconsin has accounted for over 30% of all policies sold with active endorsements through the week ending Nov 15th.
Pounds Covered:
Approximately 51.96 billion pounds of milk have been covered through the Dairy-RP program through the week ending Nov 15th, which is the equivalent of 259,800 Class III milk contracts. 93.8% of all milk production covered has been at the 95% coverage level through the week ending Nov 15th.
California and Wisconsin have led all states in pounds of milk production covered within the Dairy-RP program through the week ending Nov 15th, followed by Idaho and Minnesota. The aforementioned states combined to account for over one 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. Class III Milk volumes reached a 22 month high during Oct ’18 while Class III Milk open interest reached a 19 month high during Feb ’19. CME Class III Milk volume figures trended back towards levels experienced prior to Dairy-RP sign-ups until increasing to a 33 month high level during the third week of September and the second highest level experienced throughout the same period during the week ending Nov 1st. Class III Milk open interest figures declined to a nine year low during the first week of August, prior to rebounding over more recent weeks of data.
Dairy-RP milk production volumes covered through the week ending Nov 15th were equivalent to 11.8% of total 2019-2020 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Nov 15th was equivalent to just 1.0% of total 2019-2020 projected production volumes.