Insurance for milk

This graph shows the price of milk adjusted for inflation in 2018 dollars.
By: 
Catie Clark
Reporter

Idaho is fourth in the nation for the production of dairy products. It's not news, however, that dairy farmers are hard pressed. The shuttering of family dairy farms is a tragic story that has been repeated too many times lately.
The story is mostly economic. The price of milk and milk products is governed strongly by supply and demand and the demand for milk has been falling.
When adjusted for inflation, the current price of milk is now the lowest in a century. That makes it hard for dairy farmer to make ends meet.
Using data compiled by the Bureau of Labor Statistics, the average price of milk in 1918 was $0.35. In 2018 dollars, that's $5.86. The current average price of milk is $2.90.
In comparison, between 1935 and 1970, the inflation-adjusted price of milk was consistently over $8 in 2018 dollars.
Unfortunately, the U.S. Department of Agriculture predicts that dairy prices won't improve anytime soon.
Several years in the making, the USDA has recently set up a program to help protect dairy farmers. It's called the Dairy Revenue Protection program. While it isn't a cure-all from market forces, it establishes insurance for dairy revenues that is a parallel to the crop insurance program.
The USDA's information on the program states: "Dairy Revenue Protection (Dairy-RP) provides protection against an unexpected decline in revenue (yield and/or price) on the milk produced from dairy cows. In sum, the policy covers the difference between your final revenue guarantee and actual milk revenue during each quarter of the year."
The USDA Risk Management Agency (RMA) administers the program. More information on the new insurance program is available at https://www.rma.usda.gov/en/Topics/Dairy-Revenue-Protection.
Local livestock insurance agents should now have Dairy-RP insurance for sale. The USDA RMA has a tool on their website to help farmers find agents who offer Dairy-RP policies at https://www.rma.usda.gov/Information-Tools/Agent-Locator-Page.

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