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 first week of May. Highlights from the most recent report include:
- There were 3,649 Dairy-RP policies sold through the week ending May 3rd, with 2,148 of the policies having active endorsements. Wisconsin led all states in the number of policies sold with active endorsements, followed by Minnesota and Michigan.
- Dairy-RP policies sold through the week ending May 3rd have covered a total of 23.57 billion pounds of milk, the equivalent of approximately 117,800 Class III milk contracts and 10.7% of total 2019 USDA projected milk production volumes. 93% 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 May 3rd, 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. Class III Milk open interest declined to a seven month low during the week ending Apr 12th, however, prior to rebounding slightly throughout more recent weeks of data.
Additional Report Details
Policies Sold:
There were 3,649 Dairy-RP policies sold through the week ending May 3rd, up 59 from the previous week. Of the policies sold, 2,148 had active endorsements through the week ending May 3rd, up 45 from the previous week.
Dairy-RP policies have been sold throughout 43 states through the week ending May 3rd. Policies with active endorsements have been sold throughout 38 states, led by Wisconsin, Minnesota and Michigan. Wisconsin has accounted for over a third of all policies sold with active endorsements through the week ending May 3rd.
Pounds Covered:
Approximately 23.57 billion pounds of milk have been covered through the Dairy-RP program through the week ending May 3rd, which is the equivalent of 117,800 Class III milk contracts. 93% of all milk production covered has been at the 95% coverage level through the week ending May 3rd.
Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending May 3rd, 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. Class III Milk open interest declined to a seven month low during the week ending Apr 12th, however, prior to rebounding slightly throughout more recent weeks of data.
Dairy-RP milk production volumes covered through the week ending May 3rd were equivalent to 10.7% of total 2019 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending May 3rd was equivalent to 2.0% of 2019 projected production volumes.