U.S. Dairy Safety Net Programs: History, Program Design, and Recent Performance

➩ Federal dairy policy has shifted toward farm-level risk management. Earlier dairy programs were more directly tied to product-price support or low milk-price payments. Current programs operate in a dairy sector that produces more milk with fewer farms, and the safety net now includes both FSA-administered support and RMA insurance products.

➩ The active programs protect different measures of risk. DMC provides margin protection based on a national milk-feed margin and enrolled production history. DRP protects quarterly revenue through RMA insurance, while LGM-Dairy protects gross margin through RMA insurance based on selected milk marketings, feed equivalents, and futures-based prices.

➩ DMC’s Tier 1 structure is doing exactly what Congress designed it to do. By offering the highest coverage levels at affordable statutory premium rates, Tier 1 gives producers meaningful, dependable protection against the kind of margin compression the industry saw in 2021 and 2023, which is why the $9.50/cwt coverage level and 95% production history election have become the standard choice among enrolled operations.

➩ DRP has become the larger RMA dairy insurance product. DRP expanded quickly after its introduction for the 2019 crop year, from 29.9 billion pounds in 2019 to 64.4 billion pounds in 2020, and remained above 38 billion pounds in each year from 2021 to 2025. LGM-Dairy increased from 0.8 billion pounds in 2019 to 6.5 billion pounds in 2025, but is still well below DRP overall despite its longer history. The difference may reflect the relative simplicity of DRP endorsements compared with LGM-Dairy, which requires producers to structure coverage around monthly milk marketings and feed equivalents over a rolling insurance period.

➩  Federal dairy risk-management programs now reach a large share of U.S. milk production, a sign of how central these tools have become to producer decision-making. Since 2019, DMC production history has covered more than two-thirds of annual U.S. milk production, while DRP coverage has grown from 13.7% of production in its first year to as much as 29% in 2020, settling in the high-teens-to-twenties in recent years.

Recommended Citation: Zhang, Y., Arita, S., and Steinbach, S. (2026). U.S. Dairy Safety Net Programs: History, Program Design, and Recent Performance. ARPC Report 2026–05. Agricultural Risk Policy Center, North Dakota State University. July 21, 2026. https://doi.org/10.22004/ag.econ.404851