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 end of the second week of Feb ’21. Highlights from the most recent report include:

• There were 8,121 Dairy-RP policies sold with active endorsements through the week ending Feb 12^th, up 32 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 Feb 12^th have covered a total of 129.5 billion pounds of milk, the equivalent of 19.4% of total 2019-2021 USDA projected milk production volumes. 94.5% 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 Feb 12^th, followed by Wisconsin, Texas and Idaho.
• 12-month rolling average Class III Milk volume figures reached a record high level during the week ending Jan 15^th, prior to declining slightly over the four most recent weeks of data. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 13 month high level.

Additional Report Details

Policies Sold:

There were 8,121 Dairy-RP policies sold with active endorsements through the week ending Feb 12^th, up 32 from the previous week. Dairy-RP endorsements finished above previous year figures for the ninth time in the past ten weeks.

Dairy-RP policies have been sold throughout 46 states through the week ending Feb 12^th. Policies with active endorsements have been sold throughout 45 states, led by Wisconsin, Minnesota, California and Michigan. Wisconsin has accounted for over a quarter of all policies sold with active endorsements through the week ending Feb 12^th.

Pounds Covered:

Approximately 129.5 billion pounds of milk have been covered through the Dairy-RP program through the week ending Feb 12^th, which is the equivalent of 647,600 Class III milk contracts. 94.5% of all milk production covered has been at the 95% coverage level through the week ending Feb 12^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Feb 12^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 the week ending Jan 15^th, prior to declining slightly over the four most recent weeks of data, while 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a 13 month high level.

Dairy-RP milk production volumes covered through the week ending Feb 12^th were equivalent to 19.4% of total 2019-2021 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Feb 12^th was equivalent to just 0.6% of total 2019-2021 projected production volumes.