Lowdown: Agribusiness Insurance Costs on the Rise?

By | January 24, 2018

This week’s Lowdown focuses on the rise in frequency, complexity and severity of vehicular accidents within the agribusiness industry. Scenarios highlighted and steps outlined to reduce risk within What’s Inflating Agribusiness Insurance Costs, are worth sharing with your agribusiness clients, and you may find the risk reducing steps applicable to other industries reliant upon drivers to conduct business, (to be found on page 3).

Agribusiness Stats: According to the US Department of Agriculture, there are approximately 2.1 million farms in operation across the country with an average of 440 acres under production. Family owned establishments still account for 90% of operating farms. Employment remains stable at 856,300 country wide, distributed in shades of green on the map below. (2016 stats.)

Top states by agribusiness output and employment are:

  1. California
  2. Iowa
  3. Nebraska
  4. Texas
  5. Minnesota
  6. Illinois
  7. Kansas
  8. Wisconsin
  9. North Carolina
  10. Indiana

Trends: No different than the insurance industry, agribusiness is being transformed by drones, IoT, artificial intelligence and robotics. In addition, the business model is becoming more complex. Adding solar farms along side of farm crops, agri-retail, agri-tainment and agri-tourism bring rise to new and complex liability.

Example: Our local dairy farm, Barstows Longview Farm, has installed equipment to allow ‘self-milking’ of cows and robotic cleaning of the barns. There are fewer workers, replaced by robotics and computerized equipment. The farm also runs a deli/ice cream shop and is one of the state designated drop offs for cooking oil, which is converted through an anaerobic digestion plant, to generate electricity for 300 homes in the immediate neighborhood. Educational tours are provided to school children and weekend tourists of both the dairy and conversion plant. The complexities of this enterprise are far beyond what meets the eye, as I’m sure is true of most agribusinesses these day.

For more on tech and trends in agribusiness, check out these articles:

5 Tech and Social Trends Poised To Transform Agriculture

Embracing a Digital Age With Technology in Dairy Farming

And don’t forget to grab your download of What’s Inflating Agribusiness Insurance Costs in Research & Trends.

This subject matter, and all things cows, are near and dear to my rural heart. Happy reading and don’t forget to subscribe to our weekly Research & Trends e-newsletter and never miss out new reports and webinars!

About Pamela Simpson

Pam is the Senior Strategist, Branded Content & Research for Insurance Journal. More from Pamela Simpson

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