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 February. Highlights from the most recent report include:

  • There were 2,222 Dairy-RP policies sold through the week ending Feb 15th, with 1,251 of the policies having active endorsements. Wisconsin led all states in the number of policies sold with active endorsements, followed by Minnesota, Michigan and California.
  • Dairy-RP policies sold through the week ending Feb 15th have covered a total of 16.47 billion pounds of milk, the equivalent of approximately 82,400 Class III milk contracts and 7.5% of total 2019 USDA projected milk production volumes. 90% of all milk covered has been at the 95% coverage level. Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Feb 15th, followed by Idaho, California and Minnesota.
  • 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 16 month high during Nov ’18.

Additional Report Details6

Policies Sold:

There were 2,222 Dairy-RP policies sold through the week ending Feb 15th, up 186 from the previous week. Of the policies sold, 1,251 had active endorsements through the week ending Feb 15th, up 150 from the previous week. The weekly increases in both policies sold and policies sold with active endorsements were the largest experienced throughout the past nine weeks. Sales of Dairy-RP policies were suspended from Dec 24th to Jan 25th due to the shutdown of government operations.

Dairy-RP policies have been sold throughout 35 states through the week ending Feb 15th. Policies with active endorsements have been sold throughout 34 states, led by Wisconsin, Minnesota, Michigan and California. Wisconsin has accounted for over a third of all policies sold with active endorsements through the week ending Feb 15th.

Pounds Covered:

Approximately 16.47 billion pounds of milk have been covered through the Dairy-RP program through the week ending Feb 15th, which is the equivalent of approximately 82,400 Class III milk contracts. 90% of all milk production covered has been at the 95% coverage level through the week ending Feb 15th.

Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Feb 15th, followed by Idaho, California and Minnesota.

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 16 month high during Nov ’18.

Dairy-RP milk production volumes covered through the week ending Feb 15th are equivalent to 7.5% of total 2019 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Feb 15th was equivalent to 2.8% of 2019 projected production volumes.

2019-02-26T10:51:51+00:00