The growing subsidy gap: Why dairy needs parity with crop insurance
- ZISK
- Dec 9, 2025
- 1 min read
When Dairy Revenue Protection (DRP) was launched in 2018, the intention was to bring the successful model of federal crop revenue insurance into the dairy sector. A standard revenue protection plan for crop farmers provides coverage against both lower-than-expected crop yields and price declines. Replicating this approach for individual dairy farms was not feasible. Milk per cow yields respond continuously to changes in milk prices, component values, feed costs, and herd management decisions. Guaranteeing farm-level yields would compromise the DRP program integrity and undermine actuarial soundness. Instead, DRP bases its yield calculations on quarterly state-level data derived from USDA National Agricultural Statistics Service (NASS) Milk Production reports.
Although the Federal Crop Insurance Act places no statutory constraints on the subsidy levels federal crop insurance corporation may approve for livestock insurance, DRP subsidies were set at 44% for the 95% coverage level. At the time, crop insurance programs were subject to legislative language capping subsidies to 44% for any coverage above 90%. Aligning DRP with that standard ensured policy consistency and cost-share parity between crop and dairy producers.
December 8, 2025
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