(800) 234-1111

FINPACK News

Dairy Revenue Protection as a strategy to stabilize dairy revenue

by | Jun 7, 2019

Dairy Margin Coverage

Dairy Revenue Protection (RP) is a new tool available to dairy producers which can be used in conjunction with the Dairy Margin Coverage (DMC) program.  RP provides protection against an unexpected decline in revenue (price and/or yield) on the milk produced from dairy cows on a quarterly basis. There are five choices a farmer must decide on when enrolling in Dairy RP: 1) method to value milk (class or component), 2) Amount of quarterly milk to cover, 3) Coverage level for revenue guarantee, 4) Protection Factor, and 5) which quarterly contracts to purchase.

Pricing Methods

There are two different pricing methods for Dairy RP, The first one is a combination of Class III and Class IV prices.  One can choose any blend or mix from 100% Class III to 100% Class IV.  The other option is component pricing which requires the farmer to select different expected butterfat and protein production levels.  A dairy farmer can choose any amount of expected quarterly milk production to cover.  There will be validation checks to make sure a minimum of 85% of total milk production and 90% of components covered are actually produced.  The coverage levels range from 70 %to 95%. Dairy farmers can also elect a protection factor level from 1.0 to 1.5 in 0.05 increments.  Quarterly coverage can be purchased up to five quarters into the future.  Each of these choices affect the overall premium paid by the producer with premiums determined on a daily basis. 

Purchasing protection

Dairy RP  contracts can be purchased through approved crop insurance agents.  Rice Dairy Risk Services (https://quotes.ricedairyrs.com/) also provides daily quote updates in addition to a series of tools to study the ways Dairy RP may affect dairy farm revenue.

For more information about Dairy RP please refer to https://www.rma.usda.gov/en/News-Room/Frequently-Asked-Questions/Dairy-Revenue-Protection

612-626-5620 | jhadrich@umn.edu | + posts
Latest News
New and Improved: Financial Ratios in FINPACK

New and Improved: Financial Ratios in FINPACK

This post highlights the updated financial ratios in FINPACK. The ratio updates are based on the recent updates to the Farm Financial Standards Council's Financial Guidelines for Agriculture. The 2022 release of the Farm Financial Standards Council's (FFSC) Financial...

FINPACK News – November Digest

FINPACK News – November Digest

The FINPACK Lenders Conference is around the corner, the FINPACK 2022 update is live including new monthly Commercial Cash Flow capabilities, and the FINPACK team at the ABA Ag Bankers conference in Omaha! Register Now for the FINPACK Lenders Conference...

The New Monthly Commercial Cash Flow Capability of FINPACK

The New Monthly Commercial Cash Flow Capability of FINPACK

What's New in the Commercial Cash Flow Tool in FINPACK? The 2022 Fall Release of FINPACK adds the capability to complete annual OR monthly cash flow projections for commercial clients. These projections can be for a few months or multiple years. This replaces the...

What’s New in the 2022 FINPACK Update?

What’s New in the 2022 FINPACK Update?

The 2022 FINPACK update brings changes to Tax Forms, incorporates new Financial Standards Measures, introduces a new Cash Flow Projection into our commercial tools and more! Farm Financial Standards Update The FINAN Financial Analysis and FINFLO Cash Flow Projection...

FINPACK NEWS Digest – October 2022

FINPACK NEWS Digest – October 2022

FINPACK lenders conference registration is open, the updated Farm Financial Scorecard, lender training, and looking forward to the ABA Ag Bankers Conference Register for the FINPACK Lenders Conference The FINPACK Lenders Conference is back in-person! Join us...