Dairy Farm Revenue Insurance: Is the Application Viable?

verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. 1 Dairy Farm Revenue Insurance: Is the Application Viable? Lowering the dairy price support throughout the 1980’s led to a market milk price that has been largely determined by market forces since the early 1990’s. Consequently the base farm market milk price has varied much more than it had in the decades where the price support routinely interfered (Figure 1). Recent World Trade Organization developments threaten to further erode formal US dairy policies which support and insulate farm milk prices. In reaction to this, USDA has championed farm-level risk management tools such as a milk price options pilot program. In 2000 the Federal Crop Insurance Corporation (FCIC) authorized the Agricultural Risk Protection Act of 2000 to facilitate the provision of insurance on livestock, expanding insurance possibilities on farms to the livestock enterprise. This led to the development of Livestock Revenue Protection (LRP) and the Livestock Gros