On April 29, 2024, USDA’s Risk Management Agency (RMA) announced that the Federal Crop Insurance Corporation (FCIC) Board of Directors approved revisions to the Dairy Revenue Protection (DRP) plan of insurance. One of the big changes resulted from USDA’s National Agricultural Statistics Service (NASS) reducing their milk reporting in 2025, impacting how Yield Adjustment Factors (YAF) will be calculated for some states.
Currently, producers in the top 24 milk-producing states receive their states’ respective Actual Yield per cow, as published in USDA’s Milk Production report, when determining the YAF. The Actual Yields for the remaining 26 states are determined by grouping “pooled production regions”. The table at right shows each state and whether its Actual Yield is calculated by pooled production region or state.
NASS currently collects milk production and milk cow numbers by state for all 50 states and includes those values in the regional groupings. For example, the Pacific pooled production region is typically calculated from Alaska, California, Hawaii, Oregon, and Washington. Hawaii and Alaska each receive the Actual Yield determined by that region, while the other three states receive their own state-level Actual Yield.
Beginning in 2025, NASS will no longer publish production data for 17 states, including AK, AL, AR, CT, DE, HI, KY, LA, ME, MD, MA, MS, MT, NE, NV, NH, NJ, NC, ND, RI, SC, TN, WV, and WY. This will inevitably impact the current method for calculating Actual Yields by pooled production region.
According to section 7(g) of the DRP Insurance Policy, if NASS does not publish the needed information to calculate Actual Yields, the YAF for that state or region must be set to 1. Since NASS will discontinue reporting production data on the 17 states, those states will have a YAF equal to 1 for any 2025 coverage (only available Q1-Q3) booked prior to June 30, 2024, the end of RY 2024. Using our example of the Pacific region above, Hawaii and Alaska will receive a YAF of 1 during this period.
Starting with RY 2025 on July 1, 2024, the Actual Yields for those 17 states will revert to pooled production regions. Only this time, those pooled production regions will not include the 17 states in their calculations. So, for the Pacific region, the Actual Yield for Hawaii and Alaska will be calculated using production data from only California, Oregon, and Washington going forward.
What does this mean for producers? If they are in one of those 17 states and have Q1 through Q3 2025 DRP coverage booked prior to July 1st of this year, then their YAF will be 1, thus meaning yields won’t impact their coverage. However, if they book coverage on or after July 1st, yields will again be determined by pooled production region, just with a slightly different calculation.
