The U.S. Department of Agriculture (USDA) has announced they are updating livestock insurance policies to improve options for producers and to create more opportunities for producers to participate. USDA’s Risk Management Agency’s (RMA) has made updates to the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) policies. These updates will be effective for the 2022 and succeeding crop years.
Updates to DRP
In just its second year, DRP covers about 30% of milk production. It provided protection against unexpected decreases in prices, due to COVID and other causes, paying around $478 million to dairy producers. The changes for the 2022 crop year include:
Ensuring the Class Pricing Option remains available for purchase even when either the Class III or Class IV milk price is not published.
Relaxing records requirements by allowing monthly total pounds of milk and milk components (butterfat and protein) to be acceptable records instead of daily.
Modifying weekend sales period to end on Sunday at 9am Central Time.
Updates to LGM
LGM is available for cattle, dairy, and swine producers and provides protection against loss of gross margin (market value of livestock minus feed costs). The LGM programs saw an increase in participation over the past year. The total insured livestock and livestock products increased approximately 103% from 2019 to 2020.
The changes for the 2022 crop year include allowing producers to purchase coverage on a weekly basis instead of monthly.
In addition to DRP and LGM, another insurance options for livestock producers is Livestock Risk Protection (LRP), which is available for feeder cattle, fed cattle, and swine. It provides protection against declining market prices. Recent changes, which include increased head limits and additional subsidy increases, have resulted in a 1,000%-plus increase in program participation compared to the 2020 crop year.
Learn more about crop insurance and the modern farm safety net at rma.usda.gov.