Is your milk revenue protected?

Is your milk revenue protected?

March 09, 2021

What happens if you experience a sharp, unexpected decline in yield or price on the milk produced by your dairy herd? If that question causes your blood pressure to spike, we have good news—Dairy Revenue Protection can help ease your concerns.


Dairy Revenue Protection (DRP) policies work a lot like crop insurance. This program is offered through the USDA Risk Management Agency, and DRPs cover the difference between your final revenue guarantee and actual milk revenue on a quarterly basis each year. DRPs don’t insure against the death, loss or destruction of dairy cattle—or any other loss or damage to your milk yield—but they do offer two pricing options designed to fit any dairy farmer’s budget.


Class pricing determines coverage based on a combination of Class III and Class IV milk prices, while component pricing uses the pricing of butterfat, protein and other solids to determine coverage. You get to choose the declared butterfat test and protein test and the other solids test is fixed at 5.7 to establish the milk price. Either pricing option can be chosen on separate quarterly coverage as long as it is not insuring the same milk. Several calculation methods are available for determining final revenue guarantees.


The DRP crop year runs from July 1-June 30. Contract date change is April 30, and cancellation date is June 30. Premiums are payable at the end of the quarterly insurance period, and some farmers may be eligible for subsidies. DRP is available for purchase every business day when the coverage prices and rates are validated and published on the USDA Risk Management Agency’s website.


DRP must be purchased through an authorized crop insurance agent like Premier Insurance Services, and we are excited to help you obtain coverage for all of your crops—milk included. Give us a call whenever you’re ready to get started and our friendly agents will help you obtain the coverage you need for every crop and every season.

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