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  • ZISK

What is next for the dairy safety net?

Over the past five years, considerable efforts have been made to improve dairy producers’ financial stability through enhancements in Dairy Margin Coverage and the introduction of Dairy Revenue Protection (DRP). Beef sales constitute a substantial portion of revenue for some dairy producers, accounting for approximately 10% of their overall revenue. The decline in cattle and beef prices since September has highlighted the need to offer better tools to protect revenue from sales of cull cows and dairy calves. Here we present options and challenges in enhancing the dairy safety net to offer effective coverage for dairy producer revenue from cattle and beef sales.

Many producers are familiar with DRP, but fewer may be aware of a similar program for cattle and swine called Livestock Risk Protection (LRP). Like DRP, LRP is a private-public partnership program that is sold by licensed livestock insurance agents and offered through private insurance companies, with subsidies and reinsurance provided by the federal government. While LRP has existed for 20 years, its adoption expanded considerably since 2020 when program rules were modified to make it more affordable and effective for cattle and swine producers.

Marin Bozic

December 8, 2023

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