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

• There were 3,847 Dairy-RP policies sold with active endorsements through the week ending Nov 22^nd, up 50 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 22^nd have covered a total of 53.7 billion pounds of milk, the equivalent of 12.2% of total 2019-2020 USDA projected milk production volumes. 94.0% 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 22^nd, 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 1^st. 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, reaching a five month high during the week ending Nov 22^nd.

Additional Report Details

Policies Sold:

There were 3,847 Dairy-RP policies sold with active endorsements through the week ending Nov 22^nd, up 50 from the previous week. The increase in Dairy-RP endorsements was the second smallest experienced throughout the past four weeks, remaining below historical average figures. Dairy-RP was only quoted three days throughout the week due to the releases of the USDA milk production and cold storage reports.

Dairy-RP policies have been sold throughout 45 states through the week ending Nov 22^nd. 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 22^nd.

Pounds Covered:

Approximately 53.7 billion pounds of milk have been covered through the Dairy-RP program through the week ending Nov 22^nd, which is the equivalent of 268,000 Class III milk contracts. 94.0% of all milk production covered has been at the 95% coverage level through the week ending Nov 22^nd.

California and Wisconsin have led all states in pounds of milk production covered within the Dairy-RP program through the week ending Nov 22^nd, 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 1^st. 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, reaching a five month high during the week ending Nov 22^nd.

Dairy-RP milk production volumes covered through the week ending Nov 22^nd were equivalent to 12.2% of total 2019-2020 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Nov 22^nd was equivalent to just 1.1% of total 2019-2020 projected production volumes.