Good news, USDA RMA is making accommodations for dairy producers that have been forced to dump milk due to the Covid-19 situation. With proper documentation you should be able to count dumped milk toward your declared pounds.
- The Risk Management Agency (RMA) recognizes the potential for dairy producers to have their coverage inadvertently reduced and is updating the requirements regarding marketed milk in order to ensure the policy functions as intended.
- For the 2020 calendar year, Approved Insurance Providers (AIPs) are authorized to count dumped milk towards the milk marketings (for DRP) or actual marketings (for LGM-Dairy) regardless of whether the milk was sold.
- Producers will still have to provide supporting documentation to the AIP from the cooperative or milk handler verifying the actual pounds dumped and that the milk dumped.
- This change will provide consistency among all dairy producers on how dumped milk is handled under these policies. The amount of eligible indemnity payment is unaffected by this change. Rather, this avoids imposing a penalty that was not intended to apply in cases where a dairy producer had produced a volume of milk that is consistent with the amount of coverage purchased.
- In addition, RMA is also removing the testing requirements for dumped milk under the DRP program for producers insuring milk under the component pricing option forced to dump milk. AIPs may use the average butter fat and protein levels for dump milk not tested.
This RMA release came over the holiday weekend and we will follow up next Monday with any additional guidance from RMA or the underwriter. In the meantime, if you are dumping milk please work to have it documented with your handler.
We will be in touch with more information soon.