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 fourth week of Dec ’21. Highlights from the most recent report include:

• There were 10,669 Dairy-RP policies sold with active endorsements through the week ending Dec 24^th, up 23 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 24^th have covered a total of 171.3 billion pounds of milk, the equivalent of 25.6% of total 2019-2021 USDA projected milk production volumes. 93.9% 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 24^th, 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 34 month low level during the week ending Dec 24^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 28 month high level during the week ending Dec 24^th.

Additional Report Details

Policies Sold:

There were 10,669 Dairy-RP policies sold with active endorsements through the week ending Dec 24^th, up 23 from the previous week. The weekly increase in Dairy-RP endorsements finished above previous year seasonal levels for the 12^th 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 12 most recent weeks of available data.

Dairy-RP policies have been sold with active endorsements throughout 46 states through the week ending Dec 24^th, 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 24^th.

Pounds Covered:

Approximately 171.3 billion pounds of milk have been covered through the Dairy-RP program through the week ending Dec 24^th, which is the equivalent of 856,300 Class III milk contracts. 93.9% of all milk production covered has been at the 95% coverage level through the week ending Dec 24^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Dec 24^th, 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 11 most recent months of data and returning to a 34 month low level during the week ending Dec 24^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 28 month high level during the week ending Dec 24^th.

Dairy-RP milk production volumes covered through the week ending Dec 24^th were equivalent to 25.6% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Dec 24^th was equivalent to just 0.9% of total 2019-2021 projected production volumes.