Grains of Knowledge

2012 Agribusiness Forecasts

Tis the season for resolutions and forecasts and we want to dedicate this post to the top forecasts in the farm and agricultural space for 2012.  Here are our ideas of what to watch and expect to hear more about this year relating to farming and agribusiness:

• Food safety - this includes the FSMA (food safety and modernization act) as well as much more around food safety overall - including standards, recall, reporting and much more

 

• Farm Act - implementation of federal legislation; influences to America's food and farm policies; changes for the 2012 U.S. Farm Bill

 

•  Elections - In addition to the presidential election, 2012 will bring a flurry of state issues and local elections

 

•  Regulations - this will be an interesting year to watch with the IRS, EPA and Department of Labor's reach into the farming industry.  In a wide range of areas, from youth labor to commercial drivers’ licenses, more regulations are on the horizon

 

• Trade - export and import marketed for U.S. products, along with the fluctuating value of the dollar, makes this an area to watch

 

 What do you think about our list?  What have we missed?  Please share your comments and thoughts.

 Stacey Bruce is a region leader for the small/speciality segment of Westfield's Agribusiness Division based out of Westfield Center, Ohio, the corporate headquarters of Westfield Insurance.

 

Avian Flu - a threat again?

A recent article in Feedstuffs magazine I read online grabbed my attention - "H1N1 avian flu re-emerging".  Maybe it is becuase it is close to fall, flu season and flu shots. and I am keenly aware of the need to get my shot soon.  I also thought we had seen the end of this type of flu, but that may be only myth.

The article says the UN Food & Agriculture Organization (FAO) announced a posible resurgency of this flu and stressed there may be a "mutant strain" of this virus.  Since its introduction in 2003, the flu has killed over 300 people and infected over 500.  It has also caused more than 400 million domentic poultry to be killed and a huge economic impact globally.

The biggest concern is that the virus is able to mutant and the existing vaccines are not able to proect against the disease.  This is a concerning finding for both animals and people.

Read the article

 We are interested in learning how you protect yourself and your animals and livestock?  Please share!

Stacey Bruce is a region leader for the small/speciality segment of Westfield's Agribusiness Division which is based out of Westfield Center, Ohio, the corporate headquarters of Westfield Insurance.

Heat Stress: The Impact on Animals (Part 2 of 2)

Overview

As mentioned in Part 1, “Heat Stress: The Impact on Workers,” 2011 has been one of the hottest years on record, in all corners of the country and especially throughout the Midwest. For those whose life’s work depends on animals, it’s important to identify the risks associated with rising temperatures and humidity levels.

Heat stress in animals occurs when a combination of health and environmental factors prevent the dissipation of heat from the body. It can have devastating effects on your livestock and business, including health issues, decreases in production and fertility, high mortality rates, and other costs.

According to a July 2011 ThisWeekinAg.com article, symptoms for cattle, pigs, and poultry can vary, but basic methods of prevention and treatment are similar. These include shade, cool air, water and monitoring.

 

Major Risks & Symptoms

It’s not just about high temperatures, as humidity levels play a major role in creating risky conditions. Moderate stress can occur in temperatures ranging from 80-90 degrees, with a 50-90 percent humidity level. Other environmental factors include available shade, wind speed, solar radiation, ground cover and nighttime temperatures.

Also, individual animals can pose different levels of risk, including age, color, breed, overall health and wellness, coat type and length, disposition and much more.

While the signs of heat stress will vary by animal, the following symptoms provide a general overview of what to watch for:

• Increased body temperature
• Lethargy, lack of movement, decreased activity and reduced grazing during normally active periods.
• Open-mouthed breathing or panting.
• Increased salivating or sweating.
• Rapid breathing.
• Irregular behaviors.
• Reduced feed intake.
• Reduced production, performance, weight gain or fertility.
• Restlessness and crowding under shaded, cooler areas, or at water tanks.
• Increased mortality.
  
  

Prevention and Treatment

There are several ways to mitigate the risks of these conditions for your livestock. It should be noted that early stages of symptoms are not always evident, which highlights the importance of prevention during high-risk times.

• Identify high-risk conditions and closely monitor animals.
• Provide proper shade, which should reflect heat and reduce exposures to rising temperatures and direct sunlight. 
• Provide proper ventilation.
• Provide constant access to clean water, with adequate amounts made available at a rate of at least 25 percent body weight per day.
• Install sprinkler systems that produce large droplets, running from 2-3 minutes every 20-30 minutes, but avoid creating muddy environments that can reduce an animals ability to regulate body temperature.
• Provide proper nutrition for extreme heat conditions. One example given was providing low-fiber diets for cattle during these times because dense feed generates less internal heat during digestion.
• Acclimate animals to hot temperatures over three to four days so they can adjust their feed intake and metabolism.
• Avoid transportation and exercise during periods of extreme heat. If this must take place, complete between midnight and 8 a.m.

The Livestock Weather Hazard Guide provides guidelines that indicate the potential of heat stress at different temperatures and relative humidity. The National Weather Service (NWS) and USDA publish seven-day heat forecasts for regions throughout the country, based on four weather parameters: temperature, humidity, wind speed and cloud cover.

Treatment for heat stress will vary due to the type of animal and severity of illness, but should include measures to remove the animals from the source of the heat, cool down body temperatures, and provide hydration and nutrition.

 

Resources

• FEMA guide for protecting livestock in extreme heat “Drought, Heat Stress” PDF  training.fema.gov/emiweb/downloads/is111_Unit%2014.pdf
• Ag News and Views “Monitor and Manage Heat Stress” http://www.noble.org/ag/Livestock/MonitorHeatStress/index.html
• This Week in Ag “Are You Checking for Heat Stress in Livestock?” http://www.thisweekinag.com/article/are-your-checking-heat-stress-in-livestock
• Cattle Today “Take Steps to Reduce Heat Stress on Cattle” http://www.cattletoday.com/archive/2011/June/CT2511.php
• Ohio State University - Heat Stress and Beef Cattle http://beef.osu.edu/library/heat.html
• University of Arkansas Division of Agriculture: Heat Stress in Dairy Cattle - http://www.uaex.edu/other_areas/publications/pdf/fsa-3040.pdf

 

Cow Appreciation Day

Do you enjoy treats like ice cream, cheese, milk, steak or burgers? Then you should celebrate Cow Appreciation Day!

Cow Appreciation Day is typically celebrated on July 15, and some businesses offer specials to honor one of America’s favorite farm animals. Westfield’s Agribusiness division appreciates cows very much, and we look to write insurance for the farms where they’re housed and the facilities that process their products.

The states where Westfield Agribusiness serves customers are some of the top areas for milk production. Pennsylvania and Wisconsin are both in the top five for milk production, whereas Minnesota, Michigan, and New Mexico are included in the top ten. Other states in the top twenty-three are Arizona, Colorado, Illinois, Indiana, Iowa, Ohio, and Virginia.

Some of the items that are covered on dairy or cattle farms include milking parlors and associated equipment breakdown, farm houses and owner’s personal liability, farm autos and livestock trailers, coverage for livestock, and farm liability. Coverages for milk or beef processing facilities consist of but are not limited to transportation exposures/autos, building and associated equipment breakdown, business liability, spoilage, some product recall, and workers compensation coverage.

Did you know that Westfield Insurance once owned a 51-acre dairy farm? Called Ohio Farm, it once claimed ownership to a bull named Sybils’ Gamboge that sold for $65,000 in 1919. Read more in this past post, "The Westfield Dairy Farm." Our company's long history in farming and agribusiness enables a deep understanding of the risks associated with a dairy or beef farm and many other ag-related operations.  

So take some time to celebrate Cow Appreciation Day, and remember that Westfield is here to support those who deal with cows on a daily basis. We'd love to hear from you - what do you most appreciate about cows?

- Jessica Workinger is a student at Ashland University and is a summer intern in the Agribusiness division at Westfield.

 

June is National Dairy Month

The month of June is coming to a close, but did you know that it is National Dairy Month? The purpose of National Dairy Month is to be reminded that drinking milk and consumption of dairy products is good for our health. Main promotions for dairy month are usually though retail companies that run ads for dairy products.

So the question is, how do you celebrate National Dairy Month? Schools may have had field trips or educational events such as going to visit a local dairy farm before school let out. Another great way to celebrate is through recipes. Take time out of your day to enjoy different products such as fruit smoothies, milkshakes, ice cream, and yogurt, or try to explore and find new recipes to enjoy!

For those of you who may not be so adventurous in the kitchen, National Dairy Month can be celebrated by just knowing some quick healthy facts, so here are some you can pass along:

• Women who consumed a substantial amount of calcium and had at least 3 servings of dairy food a day were 80% less likely to become obese than those with the lowest intake.
• Lowfat dairy products (milk, yogurt, cheese) can help control body fat.
• Blood pressure can be lowered just as much as some medications by simply eating a lowfat diet with 3 servings of lowfat dairy products and 8-10 servings of fruits and vegetables a day.
• Calcium intake may help reduce the risk of colon tumors, proven by a study from The New England Journal of Medicine.
• Milk helps to build strong bones and helps to reduce the risk of fractures and osteoporosis.

Some interesting dairy facts are as follows:

• It takes more cows to produce milk annually for Pizza Hut cheese than there are people living in Green Bay, Wisconsin.
• Cows can smell something up to six miles away.
• All 50 states have dairy farms.
• It takes about 12 pounds of milk to produce one gallon of ice cream.

If you haven't already, take some time this month to appreciate cows and our farmers who provide some of our daily necessities. How are you celebrating National Dairy Month?

- Jessica Workinger is a student at Ashland University and is a summer intern in the Agribusiness division at Westfield.

Increasing Stability of Food Supply & Prices: Indoor Farming

In the Netherlands, bio-engineers are testing ways to make farming more efficient by bringing it indoors. Indoor farming aims to reduce the costs associated with farming, as well as speed up the growth of plants raised under man- made conditions.

On April 11, 2011, Associated Press reporter Arthur Max wrote an article titled, “Future Farm: a sunless, rainless room indoors,” which details the research of Gertjan Meeuws and his team of bio-engineers from PlantLab, a private research company.

The Need for Stable Food Sources

The driving force behind research on indoor farming comes from a collection of issues involving the cost and availability of food.  Max explains that nearly half of the Earth’s population lives in cities, with approximately 3 billion people hungry or malnourished. By developing urban, indoor farms, growers will be able to produce food closer to consumers, thus reducing the costs associated with transportation.

For the billions of people with adequate access to food, increasing prices are becoming a greater challenge. Soaring supermarket prices are tied to climate changes, natural disasters and drastic weather conditions that affect the harvesting of crops. 

Since January of this year, the world has faced a multitude of natural disasters and severe weather, including earthquakes, tsunamis, droughts, blizzards, floods, wildfires, and most recently, the tornado's hitting the southern United States.

As a result, the security of the world’s food supply becomes increasingly unstable. For consumers, this means skyrocketing food prices, with little hope of a relief anytime soon. With indoor farming, however, these variables can be significantly reduced by a highly controlled environment.

Creating the Perfect Plant

Indoor farming also proves to be an eco-friendly solution through the reduction of time and resources needed to grow crops. Meeuws and his team have developed a more advanced version of the greenhouse, using artificial light — Light-Emitting Diodes (LEDs) — and watering systems that enable the recycling of all excess waste.

More than four decades of research has gone in to creating the perfect calculation of light, soil, temperature and species of plants to achieve what the researchers are claiming is a growth rate that is three times faster than that of plans grown under greenhouse conditions.  It is also noted that their system does not use pesticides, and uses about 90 percent less water than typical outdoor agriculture.

Are Urban, Indoor Farms the Future of Agriculture?

We’d like to hear your thoughts on the viability of indoor farming, and whether it is a more stable and efficient way to support the world’s food supply.

What would the impact be on American farmers and the overall quality of food production? Are there alternative solutions to countering the effects of severe weather conditions and rising food prices? Please leave a comment below.

Stacey Bruce is a region leader for the small/speciality segment of Westfield's Agribusiness Division which is based out of Westfield Center, Ohio, the corporate headquarters of Westfield Insurance.

U.S. Farm Policy and the 2012 Farm Bill

In 1933, President Roosevelt put forth the first comprehensive U.S. farm bill — the Agricultural Adjustment Act — that was designed to increase the value of agriculture commodities by paying farmers not to plant on a portion of their land. Since then, the farm policy has grown to include a variety of functions farmers have come to rely on, such as loans on sealed crops, government-control prices and a safety net of direct payments.

 As USDA spending becomes more limited, other options will need to be constructed. Ellis’ article cites Ohio State University ag policy specialist Carl Zulauf, who suggests that insurance programs may be a large part of the farm safety net in the 2012 Farm Bill debate. Those programs would need support from taxpayer dollars, as the risk to cover extreme circumstances, such as a multi-year draught, would be too much for an insurance company to indemnify. 

Should the farm bill create a publicly-funded insurance program, Zulauf suggests that it should only cover a farm’s losses and not guarantee a profit. 

Ellis wrote, “If the systemic loss program becomes the farm safety net, it would replace direct payments, marketing loans, and the SURE program. ACRE would not be needed since it would be covered by the systemic risk program. The systemic risk program would also eliminate subsidies for crop insurance premiums.”

Reader Response:

We’d like to hear your feedback on how farmers will adapt to the federal budget cuts, as well as the upcoming farm bill debate.

How do you think the 2011 budget cuts will impact farm policy in the U.S.? Do you foresee these reductions having a significant impact on the 2012 Farm Bill? Please share your thoughts in the Comments below. 

Stacey Bruce is a region leader for the small/speciality segment of Westfield's Agribusiness Division which is based out of Westfield Center, Ohio, the corporate headquarters of Westfield Insurance.

Prepared for a crisis? What's your plan?

No one likes to think about the worst case scenarios that could potentially impact your business, family or organization.  However, thinking through a crisis that could occur and preparing a plan as to how you will address a crisis can be critical in mitigating the potential impact of an unforseen event.  Westfield recently partnered with Validus Services to deliver a day-long Crisis Management Training session to several of our Farm customers in Minnesota. 

From our standpoint, part of our business is to respond to the loss you have suffered.  However, an insurance policy is not a substitute for a sound crisis management plan.  Knowing in advance how you will respond to a crisis can go a long way in mitigating extent of the crisis and mitigating the impact to your business.  Production agriculture faces a wide variety of risks that includes damage to property, worker safety, food safety, public relation risks, and various liability exposures. 

Thinking through your "worst case list' is a start to developing a crisis management plan.  What are the worst case scenarios that have some likelihood of occurring and could significantly impact your ability to continue to operate your farm? 

Consider developing a crisis management plan as a part of your entire risk management program.  Your agent and insurance carrier should be able to provide you some insight on what you need to get started.  Purdue University and the Dairy Herd Network are also two areas that have some good resources on their websites.                                                                

The best crisis management plan is one that hopefully never has to be used.  However, in the event of a crisis, having a plan will  help to keep your family, employees, animals,and operations better protected as you have already taken the time to plan out your response. 

Images Source: Flickr

Craig Welsh is the Agribusiness Division Leader at Westfield Insurance.  You can connect with Craig on Twitter @cdwelsh and on LinkedIn @ Craig Welsh.

 

Peak Season Coverage: The 5th Season in Ag

Spring, summer, fall and winter are what most refer to when discussing the four seasons.  In agriculture, every now and then the fifth or "peak season" is overlooked when it comes to insurance. 

The peak season endorsement allows farmers the opportunity to purchase additional property insurance for specified cyclical periods that occur on a regular basis each year.  To activate this coverage, the customer would purchase a base limit for either their scheduled or unscheduled farm personal property (aka - their farm blanket) and then would purchase additional limits for specific times during the year(both the amounts and the dates of the increase are indicated in the endorsement) when inventories are higher than usual.

Examples of when this coverage is useful typically center around seasonal events like harvest when the value of grain storage is higher than normal or in early winter when farmers have purchased and are storing seed and fertilizer for use in the spring. 

The benefit of using the peak season endorsement is that it allows farmers to plan out their insurance needs ahead of time versus having to remember to call their agent to increase / decrease coverage throughout the year as seasonal events happen. 

 One challenge of using this endorsement is that it's important to make sure that you include an adequate number of days before and after the peak period to account for early harvest and longer than usual grain storage due to heavy snowfall or poor prices in winter.  Another example of why an adequate number of days is necessary would account for early fertilizer and seed deliveries combined with later than usual planting due to a wet spring.  If the peak days are miscalculated and a loss occurs before or after the coverage period is in effect, the loss won't likely be paid in full. 

 

 

Author Kristin Taylor is a farm and commercial agribusiness underwriter with the Western Region of Westfield’s AgriBusiness Division. She is located at the company’s headquarters in Westfield Center, Ohio and holds an underwriting responsibility for the states of Illinois and Iowa.

(Photo Source: Flickr)

 

Farm Labor Contractors

In the United States, Workers Compensation insurance is typically provided by private insurance companies (like Westfield), however there are four states who have special legislation that requires Workers Compensation coverage be provided exclusively by that State's Designated Workers Compensation program (and insurance through the private market is not an option).  Those states include: Ohio, Washington, North Dakota and Wyoming. 

Regardless of the state your business is domiciled in, Workers Compensation will pay all medical costs, loss of wages (however the amount can vary based upon the state) as well as a burial allowance for workers who are killed in the course of their employment.  It's important for any business owner to understand what's covered by Workers Compensation so they can better manage its associated costs.  One of the largest variables that employers need to understand is their experience modification (or E-Mod) for short.  E-Mods are calculations based upon loss experience for an employer and it can either add a credit or a surcharge onto a business's policy.

For farms and agribusinesses who are considered to be Farm Labor Contractors and are employing migrant or seasonal workers, it is imperative that employers abide by the Migrant and Seasonal Agricultural Worker Protection Act, which was passed in 1983 and designed to provide workers with protections concerning pay, working conditions, and work related conditions.  This law requires farm labor contractors to register with the US Department of Labor and assures the necessary protections for farm workers, agricultural associations, and agricultural employers.  You can learn more about what is required by this law by selecting the link above, but it's important to note that in many cases, housing and transportation are provided by the employer - when this is the case, injuries that occur "after-hours" but while in employer provided housing, are still covered by Workers Compensation.  Some situations where this could pose a potentially severe outcome: employees sleeping in a common area like a barracks when a fire breaks out or an auto accident where a large number of employees are injured. If a situation like this were to occur it would obviously be tragic but would also negatively impact an employer's E-Mod, resulting in higher Workers Compensation premiums.

Photo Source: OSHA.gov

Kristin Taylor is a farm and commercial agribusiness underwriter with the Western Region of Westfield’s AgriBusiness Division.