Dairy-RP and LGM-Dairy Can Now Run at the Same Time. Here Is What That Means for Your Co-op's Producers.

Price risk management in dairy has always required choosing between tools. Dairy Revenue Protection, or Dairy-RP, covers revenue across a quarter. Livestock Gross Margin for Dairy, LGM-Dairy, covers the margin between milk prices and feed costs. For years, producers could not use both programs in the same coverage period.

That changed in July 2026. Beginning this month, dairy producers can enroll in both Dairy-RP and LGM-Dairy at the same time, covering the same period. For cooperative operators who help producers think through their risk management options, this is a material change.

Here is what it means in practice.

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Why Concurrent Enrollment Matters Now

The timing of this policy change is not coincidental. Milk prices are falling.

The 2026 all-milk price forecast from USDA is $20.00 per hundredweight, down $0.70 from earlier projections. The Class I base skim milk price for July came in at $15.91 per hundredweight, down $0.84 from the prior month. HighGround Dairy forecasts cheese will average $1.70 per pound in the second half of the year, which would make the 2026 annual average $1.61 per pound, the lowest since 2018.

Producers who built their operations during a period of strong margins are now looking at a tighter second half of the year. The new concurrent enrollment option gives them a way to layer protection that was not available before.

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How the Two Programs Work Together

Dairy-RP and LGM-Dairy address different risks. Dairy-RP protects against revenue falling below a declared coverage level. It locks in a protection price tied to futures at the time of enrollment. LGM-Dairy protects the margin between milk revenue and feed costs, which is particularly valuable when both feed prices and milk prices are moving.

Running both at the same time gives producers coverage from two angles. If milk prices fall sharply, the Dairy-RP policy triggers. If feed costs rise while milk prices are flat, LGM-Dairy provides a floor under the margin. The combination is not a guarantee of profitability, but it meaningfully reduces the range of worst-case outcomes.

Cooperatives can use this as a conversation starter with producers who have relied on a single tool. For producers carrying significant debt or managing large operations, having access to layered price protection could make a difference in how they plan for fall flush and into 2027.

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What Cooperative Operators Should Do

First, make sure your producers know this option exists. The July 2026 policy change was not widely publicized outside of USDA communications. Many producers are not aware they can now enroll in both programs for the same period. Get that information in front of your producer base quickly, especially given where prices are heading in the second half of the year.

Second, connect producers with their crop insurance agents now. Both programs have sign-up periods and deadlines. Producers who want coverage for Q4 2026 need to act soon.

Third, think about how this affects your cooperative's data needs. When producers carry multiple insurance instruments, their payroll and component data become more important than ever. Accurate monthly milk weights, component data and pay price records are the foundation of any insurance audit. Cooperatives with clean, accessible data are in a much better position to support producers through a claim process.

Milk Moovement handles over 20% of U.S. milk production, and the cooperatives on our platform have that underlying data organized and accessible when it matters. If your co-op is thinking about how to support producers through a tighter price environment in 2026, let us talk about what that looks like.

Reach out at sales@milkmoovement.com or book a demo at milkmoovement.com/book-a-demo.

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