Licensed in Wisconsin, Illinois, Indiana & Iowa
262-370-9740
DAIRY REVENUE PROTECTION - DRP
Dairy Revenue Protection provides insurance for the difference between the revenue guarantee and actual milk revenue if prices or revenues decline.
It also provides a greater choice of price risk management features, providing the ability to protect the value of milk based on the value of cheese to fresh milk, protein or butterfat. Dairy Revenue Protection is an area-based federal crop insurance product that provides quarterly revenue coverage for dairy farmers. The quarters available for coverage correspond to the quarters of the calendar year, i.e., January to March, October to December. Under Dairy Revenue Protection, an indemnity is paid to a dairy farmer if the actual milk revenue falls below the final revenue guarantee. Dairy Revenue Protection will be sold daily and offers flexibility to protect revenue at varying times by offering five quarterly insurance periods. The price of the policy will vary daily based on the farmer-selected parameters and on the expected prices and risk in the market. Under Dairy Revenue Protection a farmer has only five decisions to make:
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The method to value milk in the policy;
The amount of milk production to cover;
The level of coverage (from 80 to 95 percent of the revenue guarantee);
Which quarterly contracts he/she wishes to purchase; and
The optional protection factor.
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Importantly, participating dairy farmers are not precluded from participation
in USDA Farm Service Agency’s Margin Protection Program.
LIVESTOCK RISKÂ PROTECTION - LRP
Livestock Risk Protection insurance is available for finished hogs, lambs, feeder cattle, and fed cattle.
LRP protects against declining livestock prices, only. Once an LRP application is approved, specific groups of hogs, lambs, or cattle can be insured. The owner selects the time period and the level of protection desired. Premiums are subsidized 35-55 percent by the USDA, and are now due at the end of the endorsement period. Coverage levels between 70 and 100 percent (up to 95 percent for lambs) of the Chicago Mercantile Exchange (CME) futures contract prices can be guaranteed into the future for up to 52 weeks for hogs, 39 weeks for lambs, and 52 weeks for cattle. The quantity insured is equal to the projected selling weight (carcass weight for hogs, live weight for lambs and cattle), times the number of head to sell, times the percent ownership interest. Projected selling prices for feeder cattle are adjusted for the type and sex of the cattle, and the projected selling weight. If the average of the relevant cash index price on the final two days of the coverage period is below the guaranteed price level, the producer receives a payment for the difference, for the quantity insured. If not, no payment is received.
LIVESTOCK GROSS MARGIN - LGM
Livestock Gross Margin insurance is available for cattle, milk, and swine producers.
The revenue that can be insured under LGM is actually the return over feed costs. The sales period for this product is the last business Friday of each month until 8:00pm the following evening. Several steps are involved in determining the guarantee and possible indemnity payments. Coverage may not be available in instances of catastrophic news events restricting availability of LGM prices and will resume at the discretion of RMA.