At the Federal Crop Insurance Corporation Board of Directors meeting held on August 13-15, 2025, the Board approved changes to Dairy Revenue Protection policy that would allow concurrent use of DRP and LGM-Dairy, effective with crop year 2027 (first sales date: July 1, 2026), provided that both policies are with the same AIP.

Under current rules, other insurance is not allowed for any calendar quarter for which any amount of milk is covered under DRP:

Nothing in this section prevents you from obtaining other insurance not authorized under the Act. However, you must not obtain insurance under any other livestock plan of insurance issued under the authority of the Act on milk to be marketed during any month of any quarterly insurance period for which you have coverage under this policy.

There are good reasons a producer may wish to combine DRP with LGM-Dairy:

• DRP does not offer insurance against rising feed prices, while LGM-Dairy does not provide coverage against a drop in Class IV milk prices.
• LGM sales for most calendar months close later than DRP. For example, the last day to buy DRP coverage for Oct-Dec, 2025 is September 15, 2025. In contrast, the last day LGM-Dairy coverage for November 2025 is available for purchase is September 25, 2025, and for December 2025 it is October 23, 2025. If Q4 prices increase after September 15, 2025, a producer may wish to ‘top up’ their coverage by using LGM-Dairy.

Over years, we got many requests to allow such overlapping coverage, but there were always concerns about over-insurance – protecting same milk under two different policies, and fraudulently submitting the same set of marketing records to two different AIP. RMA livestock team finally cracked this problem by suggesting a simple solution – for overlap to be allowed, both DRP and LGM-Dairy policies have to be with the same AIP.

In addition, when calculating Covered Milk Production, milk covered under LGM-Dairy for any month within the quarterly insurance period would count towards Total Declared Covered Milk Production. Consequently, if a producer markets less than 85% of milk covered under DRP and LGM-Dairy combined, then their indemnities under DRP would be prorated.

Technically, the changes to DRP policy do not mention LGM-Dairy by name, and formally any “other” insurance under which milk can be covered could potentially be combined with DRP. In practice, the only other insurance plan that covers milk is LGM-Dairy. The final approval step before this reform can be implemented are changes to LGM policy provisions. We will be filing a 508(h) modification submission in October requesting that change, and expect the Board approval in November of this year. We are also hoping that the approach approved for DRP/LGM-Dairy will also be implemented for LGM/LRP overlap – but that will need to be explicitly approved by the FCIC Board at their February 2026 meeting.

Usual disclaimers apply: The FCIC Board delegates to RMA Administrator to make any necessary modifications to make the change legally sufficient and properly implemented. Agents are reminded that RMA rules prohibit marketing of program changes before the official RMA announcement, expected on/around April 30, 2026.