If milk prices fall or feed costs rise, you have a shrinking profit margin. This policy protects against that loss by establishing a minimum on income over feed costs, ensuring the gross margin will not be less than the amount specified on the policy.
This policy provides protection from decreases in livestock selling prices while enabling producers to benefit from an increase in market prices.
Dairy Revenue Protection is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level. The expected revenue is based on futures prices for milk and dairy commodities and the amount of covered milk production elected by the dairy producer. The covered milk production is indexed to the state or region where the dairy producer is located.
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