Written by Joanna Lidback, Business Consultant
Did you listen to the recent podcast on USDA’s Dairy Revenue Protection Program, or DRP, on The Milk Check, by T.C. Jacoby & Company? The hosts interviewed Phil Plourd, Tiffany LaMendola, and Katie Burgess of Blimling and Associates, who explained how the price risk management tool works and go discussed why it has been so well adopted across the country.
The DRP program is less than two years old, but estimates show that it covers around 12% of the nation’s milk supply.
DRP is a quarterly-based insurance program that protects against sudden declines in the milk price. The policies are priced at the end of every Chicago Mercantile Exchange (CME) trading day. The Risk Management Agency (RMA) uses the final prices at the end of the trading day to establish a quarterly price forecasted through the next five quarters. This gives producers the opportunity to secure a price floor up to fifteen months into the future.
The program is very flexible, allowing producers of all herd sizes and breeds to secure a floor based on their current production and components.
Take a listen, and let us know if you have any questions or would like to discuss how DRP fits with your operation.
Link to podcast:
Is USDA’s Dairy Revenue Protection program a good deal for farmers?
The Milk Check
Charlie Messenger, Yankee Farm Credit's Crop Growers agent to enroll, 802-735-5951, email@example.com
Joanna Lidback, Yankee Farm Credit's Business Consultant, 802-735-5618,