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 August. Highlights from the most recent report include:
- There were 2,930 Dairy-RP policies sold with active endorsements through the week ending Aug 9th, up 73 from the previous week. 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 Aug 9th have covered a total of 34.93 billion pounds of milk, the equivalent of approximately 174,700 Class III milk contracts and 7.9% of total 2019-2020 USDA projected milk production volumes. 95.1% 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 Aug 9th, followed by Idaho, California 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. CME Class III Milk volume figures have trended back towards levels experienced prior to Dairy-RP sign-ups over more recent weeks, however, while open interest figures declined to a nine year low during the week ending Aug 2nd, prior to rebounding slightly over the most recent week of data.
Additional Report Details
Policies Sold:
There were 2,930 Dairy-RP policies sold with active endorsements through the week ending Aug 9th, up 73 from the previous week. The weekly increase in Dairy-RP endorsements was the largest experienced throughout the past three weeks.
Dairy-RP policies have been sold throughout 45 states through the week ending Aug 9th. 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 Aug 9th.
Pounds Covered:
Approximately 34.93 billion pounds of milk have been covered through the Dairy-RP program through the week ending Aug 9th, which is the equivalent of 174,700 Class III milk contracts. 95.1% of all milk production covered has been at the 95% coverage level through the week ending Aug 9th.
Wisconsin has led all states in pounds of milk production covered within the Dairy-RP program through the week ending Aug 9th, followed by Idaho, California and Minnesota. The aforementioned states combined to account for 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. CME Class III Milk volume figures have trended back towards levels experienced prior to Dairy-RP sign-ups over more recent weeks, however, while open interest figures declined to a nine year low during the week ending Aug 2nd, prior to rebounding slightly over the most recent week of data.
Dairy-RP milk production volumes covered through the week ending Aug 9th were equivalent to 7.9% of total 2019-2020 USDA projected milk production volumes. For comparison, CME Class III Milk open interest as of the week ending Aug 9th was equivalent to just 0.8% of total 2019-2020 projected production volumes.