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Dairy Revenue Protection


Sign up for daily quotes and updates by emailing DRP@insuringyourfuture.comcreate new email, use “DRP Quote request” as the subject line.

  • Basic Information:
    • DRP is a risk management tool that provides revenue protection similar to the current RP and Area products for crop insurance.
    • Insures dairy producers against quarterly revenue losses, indexed by state-level milk revenue, up to 95% coverage.
    • Expected prices published daily, final prices published quarterly.
    • Producer elects the following variables:
      • Pricing mechanism (Class price and/or Component price)
      • Milk production to cover
      • Coverage level
      • Protection Factor
      • The desired quarter to be covered (up to 5 quarters in the future).
    • Effective crop year is a 12 month period (July 1 –June 30) designated by the calendar year in which it ends.
    • SCD is each day during which coverage is available for purchase.
    • Sales Period begins when the coverage prices and rates are validated and published on RMA’s website by 5:30 p.m. EST.
    • Sale Period ends at 10:00 a.m. EST the following business day in which you can purchase quarterly endorsements.
    • Dairy-RP will not be sold on days when the monthly USDA Milk Production, Dairy Products, and Cold Storage reports are released.
    • Milk or dairy commodity prices that experience a limit up or down move in the futures markets will not be available for determining the quarterly expected revenue.
    • Producers can have multiple quarterly coverage endorsements for the same period however, they cannot cover the same pounds of milk.
    • A producer is allowed to have other livestock policies covering milk for the same crop year.
    • Only one policy can have endorsements in effect for the quarterly insurance period.
    • Producers can have Dairy-RP & LGM during the same crop year.
      • Coverage months can not overlap.
    • Producers can have Dairy-RP & MPP during the same crop year. No strings attached
    • Eight unique quarterly insurance periods during a crop year. (801 –808)
    • The actual ending milk or component values are based upon the monthly average prices announced by USDA’s Agricultural Marketing Service.
      • Actual ending values are posted on RMA’s website at the end of the insurance period.
      • The milk yields are based upon USDA’s National Agricultural Statistics Service Milk Production report.
    • Two pricing options for DRP:
      • Class Pricing Option:
        • Combination of Class III and Class IV milk prices
        • Based on producer’s declared price weighting factor.
        • Producer declares Class III price weighting factor (up to 1.00).
        • Class IV defaults to the difference (1.00 -Class III weighting factor)
        • A producer can elect 1.00 for either Class III or Class IV. The other Class would then be 0.
      • Component Pricing Option:
        • Combination of butterfat, protein, other solids values, and/or nonfat solids;
        • Based on producer’s declared butterfat test and declared protein test.
        • Producer declares butterfat pounds, protein pounds, & weighting factor.
        • These elections allow the producer to establish coverage for prices to mirror the expected milk components.
        • The ‘Other Solids’ test is fixed at 5.7 pounds per 100 pounds of milk.
        • The ‘Nonfat Solids’ test is 5.7 pounds plus Protein lbs of milk.
        • Butterfat test –elect between 3.25 pounds and 5 pounds in 0.05 pound increments.
        • Protein test –elect between 2.75 pounds and 4 pounds in 0.05 pound increments.
    • Coverage Elections:
      • Declared covered milk production –pounds chosen by producer to establish coverage.
      • May choose different amounts of declared covered milk production for each type and practice on the quarterly coverage endorsement.
      • Can be multiple quarter coverage endorsements for the same quarterly insurance period.
      • However, can not cover the same milk.
      • Coverage level elections between 80% -95% in 5% increments.
      • Determines the dairy revenue protection expected and final revenue guarantee.
      • May elect different coverage level for each type/practice.
      • Coverage Levels are subsidized.
      • Protection factor elections between 1.00 and 1.50 in 0.05 increments.
      • No premium due with application or when electing quarterly coverage endorsement.
      • Will be billed 25 days after the last day of the interval period.
    •  Claims:
      • AIP will notify the producer of a probable loss ten days after DRP data is released by RMA for each quarterly insurance period.
      • The producer must submit a claim to the AIP:
        • On the AIP form.
        • Include the milk production worksheet and milk marketing records.
        • Within 60 days following the date of notice of probable loss is issued.
      • Verify if the milk marketings >to 85% of the declared milk production.
      • Determine if the actual butterfat test and the actual protein test are greater than 90% of the declared component values.

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Morrissey Insurance

890 North Reading Road
Ephrata, PA 17522
Phone: 800-422-8335
Fax: 717-336-3729
Email: info@Insuringyourfuture.comcreate new email

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890 North Reading Road | Ephrata, PA 17522
Phone: 800-422-8335