Livestock Gross Margin

What is Dairy Revenue Protection (DRP)?

Dairy Revenue Protection (DRP) is an insurance solution designed to protect dairy producers against unexpected declines in quarterly milk revenue. By using futures-based pricing and production data, DRP helps you safeguard your operation from market volatility.

How does DRP coverage work?

DRP guarantees a level of revenue based on expected milk prices and your selected production amount. If actual revenue falls below this guarantee at the end of the quarter, you may receive an indemnity payment to help offset the loss.

What coverage options are available?

DRP allows you to customize coverage based on your operation’s unique needs, including:

• Milk pricing option
• Coverage level (80% to 95%)
• Quarter to insure
• Protection factor
• Amount of milk production to cover

A premium subsidy is also available, with higher subsidies generally tied to lower coverage levels.

What pricing options can I choose from?

DRP offers two flexible pricing models:

• Class Pricing: Based on a blend of Class III and Class IV milk prices
• Component Pricing: Based on butterfat, protein, and other milk component values

This flexibility allows you to align coverage with how your milk is marketed.

How are final prices and yields determined?

Ending milk prices are based on USDA Agricultural Marketing Service data, while milk yields come from USDA National Agricultural Statistics Service reports. These trusted sources ensure transparency and consistency in determining your final revenue.

What causes of loss does DRP cover?

DRP protects against revenue losses caused by changes in market prices and yields within your region. It focuses specifically on market-driven risk to help stabilize your income.

What isn’t covered under DRP?

DRP does not cover physical losses such as:

• Death of dairy cattle
• Damage or destruction of livestock
• Other non-market-related losses

When and where is DRP available?

DRP is available in all 50 states. You can apply at any time during the crop year and purchase quarterly coverage endorsements throughout the year during daily sales periods.

Why should I choose DRP for my dairy operation?

With flexible coverage design, trusted pricing sources, and built-in premium subsidies, DRP empowers you to manage revenue risk proactively—so you can focus on growing your operation with greater confidence.

How do I get started?

Contact your local AgriSompo agent to explore DRP options and build a customized protection plan tailored to your dairy operation.