Managing Risk with Dairy Revenue Protection
Curious how you can better manage today's milk market swings? The Dairy Revenue Protection Program (Dairy-RP) is a new tool that can help protect you from volatile market conditions by insuring against unexpected losses in quarterly milk sales.
For dairy producer Brett Reinford, Reinford Farms, Juniata County, the uncertainty of the current milk market made enrolling in Dairy-RP an easy decision. "Milk prices still are not great but Dairy-RP has helped us put a limit on the amount of risk our farm has to undertake, from a milk pricing perspective."
Learn more about Brett's experience with Dairy-RP.
1. What was the sign-up experience like?
Brett: It was really quite simple. We are familiar with the crop insurance sign-up process. The Dairy-RP is similar. We signed some paperwork and decided if we wanted to wait for a better milk price or take the current price offered. Our AgChoice crop insurance agent did a great job explaining the program, helping us develop a Dairy-RP strategy. There are different Dairy-RP strategies and our agent helped us pick one that we thought worked best for our farm.
2. To date, how has your business benefited from the program?
Brett: We have not received a payment from the Dairy-RP, which is a good thing! We don't want to receive a payment because that means the milk prices are down. Milk prices are trending up this year and so, for each quarter, we set a bottom for our milk. If milk prices go down, we will collect a Dairy-RP payment. That is not something we hope happens, but it does give us some peace of mind for the months ahead, helping us to better manage our cash flow.
3. Would you recommend the program to other dairy farmers?
Brett: I would recommend Dairy-RP to every dairy farmer. It is an inexpensive way to put a bottom on your milk price. Milk has been extremely volatile the last 10 years, and Dairy-RP helps eliminate the lows but also catch the highs. It doesn't always mean that you will lock your milk in for above breakeven, but being able to predict your bottom for as far out as 15 months allows you to make better financial decisions to get through the lean times.
To learn more or enroll in the Dairy-RP program, contact our crop insurance team at 800-998-5557.
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