What's the Difference Between DMC and DRP?
Article By: Mark Chilson
The main difference between Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP) is that DMC offers a margin protection between milk price and feed prices, while DRP protects you if milk prices decline. With DMC, if both milk price and feed prices go down equally and you are outside the selected margin, there is no payment. Whereas with DRP, if at the end of the insured quarter the actual milk revenue is below the revenue guarantee, the insured will receive an indemnity payment for the difference between the actual revenue and the guaranteed revenue, times by the share and the protection factor.
Dairy Revenue Protection can be used in combination with Dairy Margin Coverage, but they are available through different sources. DMC is available only at your FSA office, whereas DRP insurance must be purchased through an insurance agent.
Security Financial Bank has two experienced crop insurance agents that can provide you with more detail and the protection offered by DRP. For more information and to protect yourself against further declines in the milk price, see Mark or Jenny at Security Financial Bank at 715.672.4237.