American Farm Bureau Unveils Dairy Revenue Protection Insurance Concept

According to Dairy Herd Management on 7 May 2018, dairy farmers have another option for risk-management with a new insurance product being offered by American Farm Bureau Federation (AFBF).

AFBF, in cooperation with American Farm Bureau Insurance Services, developed a product called “Dairy Revenue Protection” insurance that helps dairies lock in revenue on milk sales. The product was approved by the U.S. Department of Agriculture’s Federal Crop Insurance Corporation.

“We know that the level of risk protection available to dairy farmers was inadequate and we saw a clear opportunity to help by specifically addressing the impact of milk price volatility on a dairy farmer’s revenue,” says AFBF President Zippy Duvall.

Dairy Revenue Protection is designed to provide multiple levels of insurance coverage based on the value of the farmer’s milk. Options available include one based on milk futures prices, while another option that focuses on milk components such as butter fat and protein.

“This coverage will help shield dairy farmers from unexpected declines in milk prices as well as unexpected declines in milk production by addressing overall revenue,” Duvall says. “We are excited about teaming up with American Farm Bureau Insurance Services to offer this new risk management tool to dairy farmers.”

In addition to the dairy pricing options, Dairy Revenue Protection functions similarly to area-based crop revenue protection insurance policies. The coverage would offer revenue guarantees based on futures prices, expected production and market-implied risk. The premiums for coverage will be subsidized.

AFBF expects Dairy Revenue Protection policies will be available in late summer 2018.


As a reminder, producers may enroll retroactively in the revised Margin Protection Program (MPP Dairy) through their local FSA office until June 1, 2018.  The MPP Dairy calculator/decision making tool can be accessed here.