DRP Results: Q3 2024

DRP Results: Q3 2024

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At the time of publishing, Q3 2024 indemnities have not yet been released by USDA-RMA. As such, the most recent quarter’s indemnity payments in this report are estimated using announced class and component prices and milk yields.

 

Overview & Key Points

 

  • As Class III and IV prices climbed higher, no indemnities were paid out for the third quarter of 2024. However, producer milk checks were surely good, with Class III and IV settlements averaging $21.26/cwt and $21.73/cwt, respectively.

  • On average, producers paid $0.34/cwt for Q3 2024 DRP coverage.

  • Nearly 18.3 billion pounds of milk were covered under DRP during Q3 2024, representing 33% of the U.S. milk supply. This was a significant increase from the previous quarter, up more than 5 billion pounds from Q2.

 

Coverage Performance by Horizon

 

 

Participation & Performance

 

 

 

Net to producers is equal to the indemnity paid minus the producer premium. Effective covered milk production is equal to the declared production times the protection factor. Class III versus IV coverage is calculated as the effective covered milk production times the class price weighting factor or the component price weighting factor.

Disclaimer: HighGround Insurance Group (HGIG) is an agency affiliated with HighGround Dairy (HGD). HGIG is a licensed insurance agency in many US states. HighGround Dairy is a division of HighGround Trading (HGT), an Introducing Broker (IB) registered under United States Laws. Nothing contained herein shall be construed as a recommendation to buy or sell commodity futures or options on futures.  This communication is intended for the sole use of the intended recipient.  Futures and options trading involves substantial risk and is not suitable for all investors.

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