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 Dec ’21. Highlights from the most recent report include:
- There were 10,405 Dairy-RP policies sold with active endorsements through the week ending Dec 10th, up 220 from the previous week. Wisconsin led all states in the number of policies sold with active endorsements, followed by Minnesota, California and New York.
- Dairy-RP policies sold through the week ending Dec 10th have covered a total of 168.4 billion pounds of milk, the equivalent of 25.2% of total 2019-2021 USDA projected milk production volumes. 93.8% 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 Dec 10th, followed by Wisconsin, Texas and Idaho.
- 12-month rolling average Class III Milk volume figures reached a record high level during Jan ’21, prior to returning to a 33 month low level during the week ending Dec 10th. Dec 10th week engine Class III Milk volumes figures rebounded to an 11 month high level, however. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 27 month high level during the week ending Dec 10th.
Additional Report Details
Policies Sold:
There were 10,405 Dairy-RP policies sold with active endorsements through the week ending Dec 10th, up 220 from the previous week. The weekly increase in Dairy-RP endorsements was the largest experienced throughout the past 14 months, finishing above previous year seasonal levels for the tenth consecutive week. Dairy-RP endorsements had finished below previous year seasonal levels over 23 of the past 24 weeks through the first week of October, prior to finishing above previous year levels over the ten most recent weeks of available data.
Dairy-RP policies have been sold with active endorsements throughout 46 states through the week ending Dec 10th, led by Wisconsin, Minnesota, California and New York. Wisconsin has accounted for over a quarter of all policies sold with active endorsements through the week ending Dec 10th.
Pounds Covered:
Approximately 168.4 billion pounds of milk have been covered through the Dairy-RP program through the week ending Dec 10th, which is the equivalent of 841,800 Class III milk contracts. 93.8% of all milk production covered has been at the 95% coverage level through the week ending Dec 10th.
California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Dec 10th, followed by Wisconsin, Texas and Idaho. 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 Jan ’21, prior to declining over the ten most recent months of data and returning to a 33 month low level during the week ending Dec 10th. Dec 10th week engine Class III Milk volumes figures rebounded to an 11 month high level, however. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 27 month high level during the week ending Dec 10th.
Dairy-RP milk production volumes covered through the week ending Dec 10th were equivalent to 25.2% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Dec 10th was equivalent to just 0.8% of total 2019-2021 projected production volumes.