top of page
  • ZISK

Addressing market volatility: Leveraging Dairy Revenue Protection

As the new year unfolds, dairy farmers are confronted with a challenging reality: reduced Class III prices compared to previous cycles. This squeeze on producer margins has amplified financial pressures across farms, leading many to seek stability amid market unpredictability. In 2024, one avenue gaining traction for weathering this volatility is the Dairy Revenue Protection (DRP) program.


But what exactly does DRP entail?

Administered by the USDA’s Risk Management Agency (RMA), DRP serves as a crucial tool for risk mitigation within the dairy sector. Operating nationwide, DRP provides a holistic approach to understanding costs, milk markets and herd capabilities. It projects expected revenue based on future prices for milk and dairy commodities, alongside the producer’s selected coverage for milk production indexed to their specific region.


DRP allows producers to protect up to 95% of their anticipated quarterly revenue. If actual milk revenue falls short of the final revenue guarantee at the policy’s conclusion, producers may receive compensation to bridge the gap, considering the share and protection plan.


May 7, 2024

0 comments

Comments


bottom of page