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Farm Bureau’s Newton explains new Dairy Revenue Protection insurance

The designer of the new Dairy Revenue Protection insurance program says starting October 9^th, dairy producers will have a very flexible new risk management tool.

Farm Bureau economist John Newton says, “It allows a farmer to cover their quarterly revenue for milk sales based on the value of milk that they determine using either Class 3 or Class 4 or component values of milk.  That is something that hasn’t been available before but fills a much-needed gap in risk coverage.

Newton tells Brownfield the flexibility of the Dairy Revenue Protection program lets producers tailor one or more policies to fit their goals.  “If you’re covering a million pounds, you could buy ten different policies for that quarter at 100-thousand pounds each, each with a different price, different coverage level, and different premium associated with it.”

Newton says the prices for premiums vary based on the needs of the farmer, but he’s been meeting with farmers and agents to talk about typical scenarios.  “In the meeting we did today, we were looking at premiums for the first quarter of 2019 at or below twelve cents a hundredweight for the Cadillac coverage option.”

Newton says producers can go all the way up to 95% coverage and choose how much milk will be covered with no minimum or maximum.  Farmers just need to be able to produce the amount that is insured.

Newton says agents handling crop insurance already have the online tools to help farmers plan their coverage, and he anticipates farmers will soon have access to these same online planning tools.