Dairy Revenue Protection Additional Information

What are the pricing options with Dairy RP?

Class Based Pricing

  • Class III, Class IV, or a combination of the two is available

Component Based Pricing

  • Uses the expected butterfat and protein percentages of a dairy’s milk for price calculation

Keep in mind that both component pricing and Class III pricing use the same underlying prices of butterfat, protein, and other solids to calculate milk price indexes.

What’s the difference between the coverage levels?

A producer may cover anywhere from 80% to 95% of the current expected quarterly revenue in 5% increments. The price that is protected changes daily as the futures market prices change. 

What is the Protection Factor?

The Protection Factor allows for additional coverage to be purchased without increasing the volume insured. A producer may select a Protection Factor anywhere from 1.0 to 1.5 in increments of 0.05. A higher Protection Factor increases flexibility by allowing a producer to purchase the coverage they want while insuring fewer pounds of production up front, leaving the opportunity to insure more at a later date.

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