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 final week of May. Highlights from the most recent report include:
- There were 3,811 Dairy-RP policies sold through the week ending May 31st, with 2,364 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 31st have covered a total of 27.97 billion pounds of milk, the equivalent of approximately 139,900 Class III milk contracts and 12.8% of total 2019 USDA projected milk production volumes. 94% 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 31st, 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 to a ten week high throughout the most recent week of data.
Additional Report Details
Policies Sold:
There were 3,811 Dairy-RP policies sold through the week ending May 31st, up 25 from the previous week. Of the policies sold, 2,364 had active endorsements through the week ending May 31st, up 27 from the previous week.
Dairy-RP policies have been sold throughout 44 states through the week ending May 31st. Policies with active endorsements have been sold throughout 40 states, led by Wisconsin, Minnesota and Michigan. Wisconsin has accounted for nearly one third of all policies sold with active endorsements through the week ending May 31st.
Pounds Covered:
Approximately 27.97 billion pounds of milk have been covered through the Dairy-RP program through the week ending May 31st, which is the equivalent of 139,900 Class III milk contracts. 94% of all milk production covered has been at the 95% coverage level through the week ending May 31st.
Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending May 31st, followed by California, Idaho and Minnesota. The aforementioned states combined to account for nearly one 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 to a ten week high throughout the most recent week of data.
Dairy-RP milk production volumes covered through the week ending May 31st were equivalent to 12.8% of total 2019 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending May 31st was equivalent to 2.2% of 2019 projected production volumes.