RMA announces enhanced livestock, dairy coverage
-The Hagstrom Report
The Agriculture Department’s Risk Management Agency on Monday announced several enhancements to insurance programs that it said will provide a more efficient level of coverage for livestock and dairy producers.
These program improvements to the Dairy Revenue Protection, Livestock Gross Margin and Livestock Risk Protection programs take effect July 1.
“These changes to livestock and dairy programs strengthen risk management options and provide peace of mind in times of unpredictable market fluctuations,” said RMA Administrator Martin Barbre.
Livestock Gross Margin: The limit on the amount of funds available to support livestock plans of insurance offered by RMA to $20 million per fiscal year has been removed.
Livestock Risk Protection changes:
▪ Expanded LRP coverage for swine, fed and feeder cattle to all states;
▪ Increased LRP subsidy from the current 13 percent for all coverage levels to a range from 20 percent to 35 percent based on the coverage level selected;
▪ Updated the Chicago Mercantile Exchange trading requirements to allow for more insurance endorsement lengths to be offered for producers to purchase;
▪ Increased per head and annual head limits – fed cattle and feeder cattle: 3,000 head per endorsement and 6,000 head annually; swine: 20,000 per endorsement and 75,000 annually; and
▪ Modified the Price Adjustment Factor for Predominately Dairy cattle to 50 percent for both weight ranges, which allows dairy cattle to reflect market prices more accurately.
Dairy Revenue Protection changes:
▪ Modified the minimum declared butterfat from 3.50 to 3.25 pounds, making the range 3.25-5 pounds, and the minimum declared protein range is expanded from 3.00 to 2.75 to 2.75-4 pounds, affording greater coverage flexibilities for dairy producers;
▪ Removed the declared butterfat test to declared protein test ratio to simplify the process for dairy producers; and
▪ Adjusted the coverage levels – removal of the 70 and 75 percent coverage levels.
▪ RMA also noted that the 2018 farm bill allows producers to enroll in LGM-Dairy or DRP and simultaneously participate in Dairy Margin Coverage, a program administered by the Farm Service Agency.