Starting July 1, 2025, the USDA’s Risk Management Agency (RMA) is making several important changes to the Dairy Revenue Protection (DRP) program for the upcoming crop year. These updates are designed to strengthen the program, improve fairness, and better reflect today’s market conditions. Here is a quick rundown of what you need to know:
1. New Terms to Know
Subsidy Capture: A critical addition, this term now formally describes the prohibited practice of leveraging DRP premium subsidies while offsetting the market risk using private trades (e.g., CME put options). This is no longer allowed, regardless of intent.
Reportable Animal Disease: If a dairy is affected by a USDA-listed animal disease, the policy now has clearer rules for how to handle coverage disruptions.
2. Premium Billing Comes Later
The DRP premium bill will now come a month later than before. This gives you more time and flexibility, especially if you are waiting on indemnity payments.
3. Eligibility and Termination Rules Tightened
You now have until January 31 (instead of December 31) to resolve any unpaid premiums or eligibility issues before your policy is terminated. Secondly, DRP rules now better match other USDA livestock insurance programs, creating a more consistent set of guidelines.
4. Higher Component Level Minimums
Under the component pricing option, the minimums for declared tests have been raised:
– Butterfat: 4.00% minimum, 6.00% maximum
– Protein: 3.20% minimum, no change to maximum (4.50%)
These reflect current herd genetics and nutrition improvements on farms across the country.
5. Stricter Requirements After Natural Disasters
If a natural disaster or major disease impacts your milk marketing, there is now a clear process to report it and adjust coverage. However, you will need strong documentation and need to notify RMA quickly.
6. USDA Can Review Brokerage Records
To enforce the new rules on subsidy misuse, USDA can now review brokerage accounts if they suspect someone is breaking the rules.
7. Tighter Rules Around Fixing Errors
There are now stricter limits and paperwork required to fix mistakes on your coverage elections. This is to prevent abuse after market prices move.
8. New Section on Prohibited Practices
A new section was added to clearly define what is not allowed under DRP, even if intent cannot be proven. This helps prevent potential misuse before it starts.
Final Thoughts
These changes may require some adjustments, but they are meant to protect the DRP program and make it work better for everyone. If you are unsure how these updates might affect your farm, HighGround is here to help you understand your options and manage risk with confidence. Contact us today to learn more.
