The American Farm Bureau Federation, in cooperation with American Farm Bureau Insurance Services, has developed a new risk-management insurance product for dairy farmers.
Approved by the Agriculture Department’s Federal Crop Insurance Corporation, the Dairy Revenue Protection insurance should be available this summer.
“We know that the level of risk protection available to dairy farmers was inadequate and we saw a clear opportunity to help by specifically addressing the impact of milk price volatility on a dairy farmer’s revenue,” said AFBF President Zippy Duvall. “This coverage will help shield dairy farmers from unexpected declines in milk prices as well as unexpected declines in milk production by addressing overall revenue.”
Dairy-RP will provide several levels of insurance coverage based on the value of the farmer’s milk. One option will use manufacturing milk futures prices, and the other option would be based on the value of milk components, such as milkfat, protein and other milk solids.
The coverage would offer revenue guarantees based on futures prices, expected production and market-implied risk. The premiums for coverage will be subsidized.