Farm bureau develops dairy revenue protection insuranceStaff Writer | May 3, 2018
The American Farm Bureau Federation, in cooperation with American Farm Bureau Insurance Services, has developed a new risk-management insurance product for dairy farmers.
America Several levels of insurance coverage
As designed, Dairy Revenue Protection will provide several levels of insurance coverage based on the value of the farmer’s milk.
One option will use manufacturing milk futures prices, and the other option would be based on the value of milk components, such as milkfat, protein and other milk solids.
A majority of dairy farmers selling milk in the U.S. are paid based on the amount of milkfat and protein in their milk.
Other than those dairy pricing options, Dairy-RP coverage otherwise functions similarly to area-based crop revenue protection insurance policies.
The coverage would offer revenue guarantees based on futures prices, expected production and market-implied risk. The premiums for coverage will be subsidized.
It is expected that Dairy-RP policies will be available in late summer 2018. ■