The USDA’s Risk Management Agency announced a new insurance policy on Wednesday to shield dairy farmers from unexpected declines in quarterly revenue from milk sales. Revenue insurance “will bring an extra level of support to a dairy sector that has been battered by losses over the past four years,” said the American Farm Bureau Federation, which developed the policy.
Sales of the policies will begin nationwide on Oct. 9 with coverage starting on Jan. 1, 2019. Dairy farmers can participate at the same time in the USDA’s insurance-like Margin Protection Plan subsidy. Congress revised the MPP this spring following low enrollment in the program and complaints that it was nearly worthless in protecting farmers from low prices.
“The number of dairies that have had to close or sell to larger operations is shocking. We have always known revenue protection insurance could help farmers weather this storm, but no one offered it,” said Farm Bureau president Zippy Duvall.
When farmers buy so-called dairy revenue protection policies, they will choose between two coverage options — milk “class” or components. Coverage levels will range from 70 percent to 95 percent of revenue. Premium subsidies are part of the package.
“Expanding the federal crop insurance program to markets that need it is key to an effective farm safety net,” said Agriculture Undersecretary Bill Northey, who oversees the farm program.
To read a USDA fact sheet on the new insurance plan, click here.