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 third week of March. Highlights from the most recent report include:

• There were 4,571 Dairy-RP policies sold with active endorsements through the week ending Mar 20^th, up 122 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 20^th have covered a total of 76.4 billion pounds of milk, the equivalent of 17.3% of total 2019-2020 USDA projected milk production volumes. 95.0% 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 Mar 20^th, followed by Wisconsin, Idaho and Texas.
• 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 4,571 Dairy-RP policies sold with active endorsements through the week ending Mar 20^th, up 122 from the previous week. The increase in Dairy-RP endorsements was the second largest experienced throughout the past 26 weeks, trailing only the previous week.

Dairy-RP policies have been sold throughout 45 states through the week ending Mar 20^th. 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 20^th.

Pounds Covered:

Approximately 76.4 billion pounds of milk have been covered through the Dairy-RP program through the week ending Mar 20^th, which is the equivalent of 382,100 Class III milk contracts. The weekly increase in pounds covered was the largest on record. 95.0% of all milk production covered has been at the 95% coverage level through the week ending Mar 20^th.

California led all states in pounds of milk production covered within the Dairy-RP program through the week ending Mar 20^th, followed by Wisconsin, Idaho and Texas. 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 20^th were equivalent to 17.3% of total 2019-2020 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Mar 20^th was equivalent to just 0.9% of total 2019-2020 projected production volumes.