Dairy Revenue Protection (DRP) is getting several notable updates heading into Reinsurance Year (RY) 2027. Here’s a brief outline of what producers need to know.
Concurrent Coverage with LGM
One of the more significant policy changes for RY2027 is the introduction of concurrent coverage between DRP and LGM-Dairy.
Previously, if you had any DRP coverage in place for a given quarter, you were blocked from purchasing LGM-Dairy coverage that overlapped with that same period. For example, if you had purchased DRP coverage for Q2 2026, you were barred from layering in LGM-Dairy coverage for April 2026, since it fell within the same coverage period. This meant that even if your DRP coverage did not fully cover your production, you could not layer in additional milk production coverage through LGM. While the rule was designed to prevent double-dipping on indemnity payments, it left some producers underinsured.
Starting with coverage purchased after July 1, 2026, that changes. Here’s how the new concurrent coverage rules work:
- Total marketings vs. total coverage: Policies will no longer be evaluated independently for production limits. Instead, the total combined production insured under both DRP and LGM-Dairy is compared against what was actually produced.
- Same AIP required: Both policies must be held with the same Approved Insurance Provider (AIP) to qualify.
- No double-collecting: While you can now layer the two programs, you still cannot collect indemnities on more production than actually existed.
The result is a more flexible risk management framework, as producers can use DRP and LGM-Dairy as complementary tools rather than having to choose between them. For more details on how this applies to the applicable dairy and livestock insurance programs, check out our blog post here.
Enhanced Subsidies for Beginning Farmers and Ranchers
RY2027 also brings a meaningful improvement to DRP premium subsidies for beginning farmers and ranchers. Previously, beginning farmers received a flat 10% subsidy increase for their first five years. The new tiered structure provides enhanced subsidies for five more years with more front-loaded support, with the largest benefit in the earliest, most financially vulnerable years:
- Year 1-2: 15% additional subsidy
- Year 3: 13% additional subsidy
- Year 4: 11% additional subsidy
- Years 5-10: 10% additional subsidy
Change to DRP Sales Closing Period
DRP is also aligning more closely with LRP when it comes to how sales periods close around weekends and holidays. Under the previous rules, if a DRP sales closing date fell on a weekend, the deadline was extended to Sunday at 9:00 am CT. If a holiday was involved, producers received an additional day. Going forward, DRP will follow the same approach used by LRP: coverage closes the next calendar day rather than being pushed to Sunday or a later date. In practice:
- Friday coverage must be submitted by Saturday morning at 9:00 am CT — not Sunday.
- Holiday closings similarly shift to the following day, not an extra day beyond that.
These changes take effect for RY2027, which starts July 1, 2026. Contact HighGround for details on how these updates apply to your specific operation. For a side-by-side look at all the RY2027 changes, download our one-page cheat sheet covering DRP, LRP, and LGM.
