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 third week of Feb ’22. Highlights from the most recent report include:

• There were 10,853 Dairy-RP policies sold with active endorsements through the week ending Feb 18^th, up 27 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 Feb 18^th have covered a total of 177.1 billion pounds of milk, the equivalent of 19.8% of total 2019-2022 actual & 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 Feb 18^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 declining over much of the past 13 months and remaining near recent 34 month low levels during the week ending Feb 18^th. 12-month rolling average Class III Milk open interest figures remained above the record low levels experienced throughout Mar ’20, reaching a three and a half year high level during the week ending Feb 18^th.

Additional Report Details

Policies Sold:

There were 10,853 Dairy-RP policies sold with active endorsements through the week ending Feb 18^th, up 27 from the previous week. The weekly increase in Dairy-RP endorsements finished above previous year seasonal levels for the first time in the past five weeks. 2022 YTD Dairy-RP policies sold with endorsements are down 21.0% from the previous year.

Dairy-RP policies have been sold with active endorsements throughout 46 states through the week ending Feb 18^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 Feb 18^th.

Pounds Covered:

Approximately 177.1 billion pounds of milk have been covered through the Dairy-RP program through the week ending Feb 18^th, which is the equivalent of 885,400 Class III milk contracts. 93.9% of all milk production covered has been at the 95% coverage level through the week ending Feb 18^th. 2022 YTD Dairy-RP pounds covered are down 42.1% from the previous year.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Feb 18^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 much of the past 13 months and remaining near recently experienced 34 month low levels during the week ending Feb 18^th. Feb 18^th week ending Class III Milk volume figures rebounded to a 14 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 three and a half year high level during the week ending Feb 18^th. Feb 18^th week ending Class III Milk open interest figures reached a four and a half year high level.

Dairy-RP milk production volumes covered through the week ending Feb 18^th were equivalent to 19.8% of total 2019-2022 actual & projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Feb 18^th was equivalent to just 0.7% of total 2019-2022 projected production volumes.