by John Stoesser on Mar 9, 2022
2022 is shaping up as the most serious year for breaks of High Pathology Avian Influenza in North America since 2015 when it ravaged the upper midwest commercial layer and turkey flocks.
IDEAL Agriculture & Marine Insurance has provided disease coverage for many species, including HPAI in poultry, for more than a decade. This coverage typically covers the cost of the birds themselves, if owned, and the loss of revenue following a break.
The poultry industry is not immune from the effects of an open and free market, and operational margins are as thin as in any competitive business sector. Most poultry producers, whether they be integrators, contract growers, or those in between, cannot comfortably squeeze out the financial resources needed to purchase a transfer of risk to an insurer, even though premiums are relatively modest. It is only when the threat is perceived as greater than the immediate cost is there motivation to seek coverage.
That is akin to trying to buy flood insurance when the river next door is rising, or wildfire insurance when the adjacent state forest is aflame. Insurers have to watch their bottom lines, too, and they seek to spread risk, not only geographically but as importantly in time as well, to allow coverage to be available and affordable.
Many physical risks can be mitigated by solid, best practices bio-security, and animal agriculture operations of any scale in the United States and Canada have universally significantly improved their risk profiles through constant incremental bio-security improvement. Yet the risk remains, as evidenced by 2.8 million of the national flock now gone.
Migration happens twice a year, every year. Although reduced by good bio-security the risk is not going away.
Until the current pace of incidents recedes, coverage will be generally unavailable. When it does subside, producers should consult with their professional independent insurance agents or brokers and discuss the options that are available on an ongoing basis. They can then speak with us and we will be happy to discuss available options.
IDEAL Agriculture & Marine offers a wide range of insurance products, distributed primarily through independent insurance agents, designed to support agriculture, agri-business, and global transportation and supply chain operations. Insurance agents and brokers having clients within the animal agriculture sectors are encouraged to visit us for more information.