Looking at the UK’s response, US farmers can learn some valuable lessons. Most importantly, the UK government did not designate the outbreak as a medical emergency, which tied the hands of those agencies set up to respond to outbreaks. Then when the emergency was proclaimed, the agencies were slow to assemble their emergency response teams.

Also, the outbreak was discovered on one farm during a bank holiday weekend. Charges that the government could have reduced the number of exposures by closing the establishment on Friday instead of waiting until the following week imply that the 93 cases at that farm could have been much lower.

What can US farmers do to reduce the risk of spreading infectious disease among visitors? If your operations are open to the public, put processes in place that limit the amount of exposures guests have to your livestock. Establish and enforce a hand-washing policy and supply jumpsuits and boots to all visitors to limit any potential virus from leaving your facility.

If your visitors are occasional, take the same precautions. Also, make sure visitor vehicles are not parked near your vehicles or animal enclosures. Your visitors could also be bringing the virus to you, so take extra care to ensure you limit exposure to outside equipment and people.

As for the animals, those that come in direct contact with visitors should be tested regularly for virus and other disease contaminants. If possible, keep those animals separate from your other livestock to prevent widespread outbreaks.

If you suspect or see any signs of illness, close your operations to visitors and quarantine any animals under suspicion.

What ways do you use to protect your livestock and visitors from viruses and disease?

Photo credit: Paul-W

The hen supplier Maine Contract Farming was recently handed an invoice for $25,000 in animal cruelty penalties and $100,000 to help the state monitor hen and egg operations throughout the state. The charges came after undercover video revealed allegations of animal cruelty, showing animals being mistreated and left to die in trash bins.

The fines aside, the company could see longer tailed business backlash from the incident. Since videos exist showing the instances of animal cruelty, the company could have a difficult time recovering from the negative image and the resulting impact on business profits. Maine Contract Farming has released statements reiterating their commitment to animal safety and welfare, but damage to the reputation can take years to overcome.

From an insurance perspective, such illegal or unethical practices may be covered under an employee practices liability policy, or errors and omissions policy. Also, larger farm businesses with less management oversight would do well to consider purchasing business reputation coverage. While many companies do their best to prevent such instances, larger operations may lack the supervisory capabilities of say an overnight shift or a large-scale operations spanning a number of facilities on the same property.

Preventative measures include installing video cameras in unsupervised areas. Alert employees to their responsibilities and train employees regularly on proper animal handling and operations oversight. Also, introducing accountability to your employees can help to reduce significantly the likelihood of cruelty or misbehavior that could damage irreparably your reputation and business practices.

If you’re unsure what your policy covers, contact me and I’ll go over your current policy with you. If you don’t have coverage for employee practices liability, contact us today.

Flickr photo credit: Max xx

How extensive the damage is remains to be seen, but the West Virginia Commissioner of Agriculture, Gus Douglass, has requested cooperation from the agriculture community and urban residents to determine the levels of damage caused by deer throughout the state. The state will measure direct crop losses; property losses; increased costs to deter deer, and; changes to what farmers plant in order to attract fewer deer. 

The study* will attempt to uncover the true level of damage caused by deer in the state, and hopefully will help with deer management programs going forward. But farmers in all states where deer live have their own issues with controlling the animals. If deer are a problem in your farm operations, consider the following preventative measures:

• Fencing. For fencing to be an effective deer deterrent, it has to be high enough to prevent deer from jumping over it. While most experts contend that deer choose to go under or through a fence rather than jump it, if they’re hungry, they’ll jump. Deer can jump up to ten feet high.  Researcher at Montana State University has shown that fences that are 6 feet high can be an effective deterrent to keeping deer and elk from crops.  Here is a resource for cost effective methods to modify existing fencing here. 
• Electric Fencing. Electric fences can be an inexpensive way to deter deer from destroying your crops. Fencing off small fields is a cheap way to decrease the deer damage. However, deer probably won’t be deterred by the shocks of an average setup unless it’s through the nose. Many farmers will place peanut butter baits on the fence, giving deer a jolt when their noses touch the bait.  
• Repellents. Used regularly, this can be an expensive option, but modern repellents are successful in keeping deer damage to a minimum.  Dogs can also be a very effective repellent – if confined to the property, the smell of their urine when marking the property works well, with the added bonus of rabbit, mice, and groundhog eradication. 
• Noise. Alarms, and automated lights are just a few ways to scare deer from the property.  However, to be most effective, they should be random, and motion activated.
• Deer management programs. Work with your local game commissioners to discuss and resolve deer control issues. Many commissions offer special hunting licenses for areas of heavy damage.

Deer damage crops, trees, plants and flowers and the damage is increasing every year as populations continue to climb.  Disease and parasites which infect deer can affect livestock.  West Virginia is conducting a Deer Damage study*.  Farmers across the nation have issues with deer.  What deterrents or deer control methods have you used?  Which ones have you found to be effective, and which ones haven’t?  How much crop/livestock loss to you attribute or factor in to deer and other pests?

*Read the study details: http://www.wvagriculture.org/news_releases/2010/5-13-10.html

Flickr photo credit: The Crow Hand

Yet that’s exactly what one former tomato grower is charged with. Frederick Scott Salyer has pleaded not guilty to charges of conspiracy to inflate the price of tomato products. Of all tomatoes grown in the US, 95 percent is grown by five companies based in California. At the moment, there are no charges brought against Salyer’s alleged co-conspirators.

The U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration is cooperating with the Justice Department to provide evidence that the alleged monopolistic practices of the businesses in question have harmed market values. They’re also providing information on other alleged monopolies – namely, the meat packing industry. Allegations of price manipulation have been lodged against five of the country’s top meat packing businesses. Antitrust has indeed infiltrated agriculture.

In agribusinesses, much like any other business operation, the same rules apply. Just because the product is food doesn’t negate the need for market protection from price fixing.  For that reason, farmers along the supply chain and beyond need to carry the necessary insurance coverage to protect against any claims of illegal activity.

Ask these questions:

- Does your current general liability insurance policy cover errors and omissions? If so, does that include illegal acts?

- Where in the supply chain does your operation fit? Is there any collaboration among you and key decision makers on the purchasing side?

- What are your contractual obligations to your buyers? Have you assumed any additional liability in your contracts that could leave you on the hook for their misdeeds or errors?

- Has your buyer convinced you to sell only to his or her company or offered you some exclusivity deal?

If you’re not sure how much liability or liability coverage you have currently, contact a farm insurance specialist to review all your contracts and exclusions. Agreements made between you and your buyers could cause unnecessary litigation in the future.

*Department of Justice link relating to Salyer case:  http://www.justice.gov/atr/public/press_releases/2010/258324.htm

Flickr photo credit: Ben McLeod

The proposed cuts come from the crop insurance program and are three times that of past proposed cuts that were rejected by Congress. Worse, the Congressional Budget Office, having seen the proposal, has reduced the budget available for use in the next farm bill budget by a staggering $3.9 billion. With skyrocketing crop insurance liabilities – $80 billion in 2009, up from $31 billion in 1999 – farmers will be hard pressed to find essential coverage for all farm business risks. 

Farmers need to increase the emphasis on risk management and preventing those risks that can be controlled. Some areas of concern include:

Equipment safety. Make sure your machinery and all farm-related equipment is in proper working order and that all workers understand how to use equipment correctly. Train all new employees on equipment use and make sure your equipment is inspected regularly to safeguard against accidents.

Property safety. Inspect your buildings and grounds every week to ensure buildings are free from debris or damage and make sure the grounds pose no hazards such as uncovered wells, ground water contamination risks, or electrical hazards.

Emergency training. At least two people on your property should be trained in handling emergency situations. Ideally all employees should have basic first responder training. Also, make sure to stock necessary emergency supplies.

Animal safety. Keep dangerous animals separate from places where humans interact with other animals. For example, don’t pen bulls near horse-riding rinks. Make sure you safeguard visitors from livestock and pets, such as dogs.

Chemical safety. Store chemicals properly and away from both ground water sources and livestock. Lock all storage facilities and make sure the buildings are maintained to prevent contamination of the chemicals and potential fire or health hazards.

Limited operation entry. Make sure to post adequate signage spelling out clearly visitor requirements, such as hunting permissions and supervision of children.

As the new farm bill takes shape, it’s difficult to say if there will be a significant reduction in insurance coverage. The smart farmer will plan now to lower risk potential in order to offset any lack in future coverage.

USDA Standard Reinsurance Agreement:  click here

Flickr photo credit:  ƒernando

Certainly more emphasis has been put on agroterrorism in the last decade, but it’s now consider part-and-parcel of the threats that can befall an agriculture business. The terrorism threat is still, thankfully, just a potential threat and not a realized one, but agriculture agencies and the federal government are giving real credence to the potential. The USDA listed agroterrorism as one possible source of loss exposure that farms face.

An attack on the food supply could have devastating consequences. Shipments off infected farms would halt. Quarantines would be enforced. Highway traffic could be halted on routes where suspected contaminated trucks have traveled. And the dollar amount could be devastating – a 2001 UK-based outbreak of hoof-and-mouth disease alone cost $3.3 billion (US dollars) in losses and caused the euthanizing of over 6 million animals. Another $8.3 billion was lost in tourist dollars.

While the majority of threats to the country’s food supply have come from natural elements – disease and Mother Nature – the government is placing enough emphasis on the possibility of terrorism that agribusiness owners should have a plan in place to reduce the chances of terrorists reaching the food supply. The livestock ID program started in 2004 was the government’s first real attempt to put controls around the food chain.

Also, the government has tightened security at US entry points to try quelling any attempts to import dangerous pathogens.

In order to reduce the chance of an attack on your livestock, the Congressional Research Service at The Library of Congress suggests the following:

• Make sure your livestock enclosures limit contact between livestock and people or wild animals.
• Make sure all people, clothing, vehicles, equipment, and supplies entering the farm are disinfected.
• Use existing testing and detection methods for locating and managing natural/accidental disease outbreaks.

Review your insurance coverage. Will it respond in the event of a terrorist attack on your animals or grain? If you have questions, call your insurance broker or me. I specialize in farm insurance coverage, and I’d be happy to provide you with the most updated coverage information.

Flickr photo credit: stuck in customs

Adding to the good news is the number of jobs associated with the rise in popularity of the farmers markets. In Iowa alone, a surge in farmers markets consumers resulted in 374 direct jobs and 200 indirect jobs last year.

Selling produce or meat products at the local farmers market is an attractive business option for farmers looking to secure more avenues to get their products in front of consumers. However, before setting up shop in the local parking lot, understand the risks of selling in an uncontrolled environment. Six things to consider:

Are your meat or produce products protected? Do you have a process in place that reduces the risk of product loss, product contamination, or consumer injury claims?

What are your storage and transportation methods? Do they conform to federal, state, or local regulations?

Does your local regulatory body require permits to sell produce or meat products? What are the requirements for setting up a temporary shop?

Do you have adequate refrigeration and protection for your meat products? How do you safeguard consumers and your products?

Does your current insurance policy cover the risks associated with selling at and transporting to and from farmers markets? Are these types of sales and locations included or excluded from coverage?

Do you need an endorsement or an increase in your coverage capacity to sell at farmers markets?

When in doubt, talk with your farm insurance broker. Make sure you have adequate coverage and risk management processes in place before setting up shop.

Flickr photo credit: NatalieMaynor

That’s because today’s high-yield food needs often put farmers in the position of using chemicals and growth hormones in an attempt to keep up with demand. While most farmers take great care to run their businesses responsibly, sometimes the mere process of raising herds can create biohazards and cause additional stresses to our water sources.

To commemorate the 40th anniversary of Earth Day, the Cattlemen’s Beef Board and National Cattlemen’s Beef Association outlined several ways for farmers to reduce the impact their herds have on the environment. They include:

1. Using biofuels in farm operations
2. Protecting wetlands and streams by fencing them off, creating a buffer to help control bank erosion and runoff
3. Planting trees as windbreaks to protect soil, herds, and offer wildlife shelter
4. Planting grass in erosive areas to maintain soil
5. Keeping wildlife habitats and nesting areas
6. Optimizing feed delivery to cut down on fuel consumption
7. Discouraging fire hazards by removing weeds and residue build-up
8. Feeding herds locally grown feeds to reduce fuel consumption
9. Maintaining open space grazing areas

Examine your herd maintenance and feed crop practices to see where you could reduce your farm’s impact on the environment. What is the long-term environmental impact of each chemical you use for fertilizing or weed / pest control? Are there products available that can reduce that impact while netting the same results? How is your water supply protected from herds or runoff? How are you protecting ground nesting areas or other wildlife habitats?

It behooves farmers to embrace better environmental practices. Preservation of the land that sustains our agribusiness is smart business. Check with your farm insurance broker to see if there are environmental checklists or guidelines to help you improve your environmental practices.

Flickr photo credit: strangepill

Farmers facing higher feed prices due to poor feed crops may be tempted to cut back on the amount of feed supplied to field livestock. However, the danger to the livestock is more critical this year. Because of some unusual growing conditions this past season, forage crops could lack adequate nutrients for grazing livestock.

Some of the dangers your herds face include:

• Deep snow, snow drifts, and potential inability to reach shelter
• Frozen water supplies
• Dangerous temperatures
• Little to no shelter in pastures
• Inadequate forage
• Power outages and subsequent loss of heat and water

 One of the most difficult tasks is providing fresh water to your livestock during extreme cold or large snow amounts. But to ensure the safety of your livestock, and your investment, it’s critical that you develop a delivery process that guarantees your animals won’t be malnourished or dehydrated in such harsh conditions.

Livestock experts are urging agribusiness owners to stay on top of the health and physical condition of their animals. An unhealthy animal now will have little time to recover as winter worsens in the coming months.

To prevent loss of livestock due to winter conditions, develop and practice the following livestock management steps:

• Provide shelter for cattle. Horses have an easier time navigating snow, but both cows and horses are hampered by hard, packed snow. If possible, move your herds to safe shelter and provide adequate food and water. Corrals and lean-tos offer better containment and safer means by which to ensure the herds are fed and watered.
• Keep enough food and forage on hand to make it through at least five days of extreme weather conditions.
• Check your herds daily for signs of illness or deteriorating health. Develop a back-up plan for handling ailing animals.
• Check water supplies twice daily, especially in frigid conditions.
• Make sure your livestock insurance is up to date and covers your current herd numbers.

 Please contact us if you have questions on preventing livestock loss or applying insurance to your investment.

Flickr photo credit: Clear Inner Vision

 Environmental group objections of climate change and environmental damage notwithstanding, agribusiness owners are happy because of the potential creation over 136,000 jobs. The federal government is looking to ethanol as a first step in cutting dependencies on foreign oil. It would seem that ethanol is the issue that could restore profitability to a flagging agriculture industry.

Yet there are risks, many still to be discovered. No one is arguing the side effects of an ethanol-based agriculture industry focus. It takes little imagination to see how lower corn production/harvest, such as this year’s widespread inability to harvest crops due to weather, could limit ethanol’s positive impact on the industry. That argument, along with the objections raised with the food-for-fuel debate, has increased the push for cellulosic-based ethanol products culled from grasses, wood chips, and other biomass products.

Tests have shown that ethanol works well in cars built after 2001, prompting the EPA’s announcement. While the lack of an immediate decision by the EPA disappointed some, the industry is hopeful a decision will come soon. In the meantime, the Renewable Fuels Association is pressuring the EPA to approve a 12 percent ethanol blend immediately in hopes that the lower blends would jump start market share.

The question going forward – how much room is there in the ethanol market for agribusiness? What would it cost to convert your business to a ethanol production model? How will insurers handle insuring the product? At the moment, there are a few ethanol insurance products on the market, but the agriculture insurance industry lacks historical data to accurately assess risks. Based on current crop models, insurance pays for loss in much the same way it does for lost harvests.

If ethanol production is in your future, contact us. We can walk you through the various available policies, limits, and exclusions.

Flickr photo credit:  mrobenalt