A new dairy insurance service from American Farm Bureau Insurance Services will bring an extra level of support to a dairy sector that has been battered by losses over the past four years.
AFBIS’ Dairy Revenue Protection insurance policy, available by early October, covers potential revenue loss over five quarterly insurance periods.
American Farm Bureau Federation Chief Economist John Newton developed the insurance product in partnership with AFBIS and economists from the University of Minnesota and Cornell University. It fills a demand not met by previous products.
“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. We have always known revenue protection insurance could help farmers weather this storm, but no one offered it. That’s why AFBIS is stepping up and rolling out this insurance now, when the need is so great. We appreciate the support from the Agriculture Department and look forward to the rollout by October 9.”
U.S. Department of Agriculture officials support the move toward revenue insurance for dairies.
“Expanding the federal crop insurance program to markets that need it is key to an effective farm safety net,“ Under Secretary of Agriculture for Farm Production and Conservation Bill Northey said. “Because of cooperation with partners like the American Farm Bureau Federation, we are able to offer this new product in a way that it can be flexible based on the needs of dairy producers.”
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.
Coverage options start at 70 percent and are available up to 95 percent, in 5 percent increments.
For more information, visit www.dairyrp.com.
