Dairy farmers are being offered a new insurance program through American Farm Bureau Insurance Services to help bring an extra level of support to a sector that has been battered by losses over the past four years.
The Dairy Revenue Protection insurance policy covers potential revenue loss over five quarterly insurance periods. Producers opting for insurance protection are not precluded from participation in the USDA Farm Service Agency’s Margin Protection Program.
The insurance product was developed by American Farm Bureau Federation Chief Economist John Newton in partnership with the organization’s insurance services and economists from the University of Minnesota and Cornell University. It fills a demand not met by previous products and has the support t of USDA.
“Farmers have been suffering, and dairy farmers especially,” American Farm Bureau Federation President Zippy Duvall said. “The number of dairies that have had to close or sell to larger operations is shocking.”
Dairy farmers will have the option to select between class or component pricing options. The class pricing option uses an average of Class III and Class IV milk prices based on the insured’s declared class price weighting factor. The component pricing option uses butterfat, protein and other solids prices, as well as the declared butterfat and protein test to determine an insured component value of milk. Pricing options allow farmers to customize their price elections more accurately according to individual price risk.
“We recognize there is not a silver bullet to quickly bolster the dairy industry and that policy solutions are hard to come by whether working through the farm bill process or some other legislative vehicle,” said Jack Irvin, OFBF senior director of state and national affairs. “But Farm Bureau did not use that as an excuse and took a very proactive approach to finding solutions and are proud to offer another tool through this dairy revenue product.”
Coverage options start at 70 percent and are available up to 95 percent, in 5 percent increments. Sign up for the insurance coverage beginning Oct. 9. Visit dairyrp.com for details.