You can blame changes in the industry such as ethanol production for the increased demand for grains. And for that same reason, farmers are now handling the hauling of that product more often than in the past. Biofuel consumption of grains, according to a study by Iowa State’s Center for Agriculture and Rural Development, has revamped how grains are brought to market. The study uncovered a new trend – farmers purchasing their own trucks and hauling grain from fields directly to market, circumventing grain elevators entirely.

 Iowa’s grain production and delivery has seen the most shift in transportation methods. The share of Iowa corn sold directly to processors doubled in 1999-2000 and 2006-2007, with the percentage of grains being delivered directly to market at 32 percent in 2007-2008. Also, while sales to grain elevators remained the largest market, there was a measurable shift as the market’s sales declined. Moving product directly from the farm to the processor represents a significant cost savings for farmers, according to the report.

 With this direct marketing becoming the trend, now’s the time to review your agriculture insurance program. If you have changed your business methods, you need to understand how those changes affect your risks of doing business. In the case of direct marketing of grains, you’re now assuming transportation risks, including permits for hauling, product safety, accident coverage, and any number of other new loss exposures. While general liability insurance products cover onsite risks, the moment you assume delivery responsibility, you acquire a new set of risks not covered by your basic agriculture insurance policy.

 An agriculture insurance broker specializing in your business can help you understand the risks from a firsthand perspective. Saving money by hauling it yourself may sound like a sweet deal, but only if you approach the market with a level of protection that helps guard against these new areas of potential loss.

 Flickr photo credit: CanadaGood

Filed under: Agribusiness by afis blogger