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 March. Highlights from the most recent report include:
- There were 4,449 Dairy-RP policies sold with active endorsements through the week ending Mar 13th, up 128 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 Mar 13th have covered a total of 72.2 billion pounds of milk, the equivalent of 16.4% of total 2019-2020 USDA projected milk production volumes. 94.8% of all milk covered has been at the 95% coverage level. Wisconsin led all states in pounds of milk production covered within the Dairy-RP program through the week ending Mar 13th, followed by California, Idaho 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 19 month high during Feb ’19. More recently, 12-month rolling average Class III Milk volumes figures reached a 33 month high level during the most recent week of available data, while 12-month rolling average Class III Milk open interest figures declined to a record low level.
Additional Report Details
Policies Sold:
There were 4,449 Dairy-RP policies sold with active endorsements through the week ending Mar 13th, up 128 from the previous week. The increase in Dairy-RP endorsements was the largest experienced throughout the past 25 weeks.
Dairy-RP policies have been sold throughout 45 states through the week ending Mar 13th. Policies with active endorsements have been sold throughout 41 states, led by Wisconsin, Minnesota, California and Michigan. Wisconsin has accounted for over 30% of all policies sold with active endorsements through the week ending Mar 13th.
Pounds Covered:
Approximately 72.2 billion pounds of milk have been covered through the Dairy-RP program through the week ending Mar 13th, which is the equivalent of 361,100 Class III milk contracts. The weekly increase in pounds covered was the largest on record. 94.8% of all milk production covered has been at the 95% coverage level through the week ending Mar 13th.
Wisconsin led all states in pounds of milk production covered within the Dairy-RP program through the week ending Mar 13th, followed by California, Idaho and Minnesota. The aforementioned states combined to account for nearly 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. Class III Milk volumes reached a 22 month high during Oct ’18 while Class III Milk open interest reached a 19 month high during Feb ’19. More recently, 12-month rolling average Class III Milk volumes figures reached a 33 month high level during the most recent week of available data, while 12-month rolling average Class III Milk open interest figures declined to a record low level.
Dairy-RP milk production volumes covered through the week ending Mar 13th were equivalent to 16.4% of total 2019-2020 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Mar 13th was equivalent to just 0.8% of total 2019-2020 projected production volumes.