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USDA Announces Risk-Management Revisions Affecting Dairy

May 4, 2021

USDA on April 28 announced an update of its livestock insurance policies intended to improve options for producers and create additional opportunities for producers to participate. NMPF, which in the last Farm Bill played a critical role in allowing Risk Management Agency programs to allocate unlimited funds for dairy farmers to protect themselves against market volatility, urges dairy producers to consider the new provisions when making risk-management plans.

The USDA Risk Management Agency (RMA) updates to the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) policies will be effective for the 2022 and succeeding crop years.

DRP, which covers about 30% of U.S. milk production, paid roughly $478 million to dairy producers in 2020 as the COVID-19 pandemic brought heightened volatility to markets. 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 9 a.m. Central Time.

The LGM program, available for dairy, cattle, and swine producers, provides protection against loss of gross margin (market value of livestock minus feed costs). Changes for the 2022 crop year include allowing producers to purchase coverage weekly instead of monthly.

For more detailed information on changes to these and other USDA Risk Management Agency crop insurance programs, visit