DRP Results: Q3 2026

DRP Results: Q3 2026

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Key Takeaways

  • Estimated indemnities for Q3 2026 averaged $0.63/cwt, up $0.54/cwt from last quarter. After factoring in producer premium costs, which averaged $0.42/cwt, the estimated net to producers was a gain of $0.22/cwt.
  • Just under 19.6 billion pounds of milk were covered under DRP during Q3 2026, the third-largest total for the program. 32.9% of the US milk supply was covered during the quarter.
  • Setting aside yield adjustment factors (YAFs) and looking at class pricing alone, both Class III and Class IV endorsements triggered indemnities in Q3 2026. The Class III price settled below the 95% coverage level on 272 of 274 days (99% of the time), whereas Class IV did so on 110 of 272 days (40% of the time).

Estimated. At the time of publishing, Q3 2026 indemnities had not yet been released by USDA-RMA. The most recent quarter’s indemnity payments are estimated using announced class and component prices and milk yields.

Results by quarter

Pick a quarter to see what DRP covered, paid, and cost. Lifetime runs from Q1 2019 through Q3 2026.

Coverage mix

Class III and Class IV coverage includes both class price and component price coverage.

Coverage performance by horizon

DRP can be bought up to five quarters out. Each nearby index is a different sales window, so each locked in a different expected price.

Estimated indemnity ($/cwt)Producer premium ($/cwt)

How often coverage would have triggered

Each point is one sales day. The line is the 95% coverage level that day’s expected price set for Q3 2026. Green shading marks days when the final settled price came in below it.

Class price only, before yield adjustment and weighting factors. Hover or tap the chart for a day’s numbers.

Impact of yield adjustments

The yield adjustment factor (YAF) is the actual yield in USDA’s Milk Production report divided by the expected yield at the time of coverage. Above 1.00, the potential indemnity is reduced. Below 1.00, it is enhanced.

Source: USDA-RMA, HighGround Dairy calculations. Net to producers is the indemnity paid minus the producer premium. Effective covered milk production is the declared production times the protection factor. Class III versus IV coverage is the effective covered milk production times the class price weighting factor or the component price weighting factor. Download the PDF report.

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. Past performance is not necessarily indicative of future results.

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