How livestock coverage helps you manage your farm’s risks
The livestock industry has taken a battering over the past year with drought, bushfires, and floods. But that doesn’t touch on the pandemic’s impact on freight across state borders and global oceans, as well as weaker demand for meat and wool.
Even before COVID-19 hit, Meat and Livestock Australia had issued a report saying yield volatilities and returns were riskier for Australian farmers than their peers across the globe. The nature of these risks regularly change, as do the tools on hand to manage them, it says.
The best way to navigate multiple known and emerging risks simultaneously is through farm business management. The MLA encourages livestock producers to boost their financial resilience and build capacity to better cope with production, market and institutional shocks.
About more than just cattle
Livestock production is as diverse as the risks. While the main livestock sectors are cattle, sheep, dairy and pork, other animals include goats and alpacas.
You might think a farm or livestock policy covers your animals for most eventualities. Policies usually cover livestock in transit or while being temporarily removed, but how temporary is temporary? And what happens when they arrive at their destination?
Livestock insurance usually covers your animals and farm for:
- Animals straying
- Vehicle collision
- Flood
- Earthquake
- Fire
- Lightning
- Explosion
- Smoke
- Vandalism
- Theft
- Riots or civil disturbances
Some livestock policies can also cover perils such as wild animal attacks, drowning, injury due to falling objects, or being loaded or unloaded. It may also include accidental shooting within limits. As your broker/advisor, we can easily verify the inclusions and exclusions on a policy you’re considering.
Ultra protection for your flock or herd
You may want more peace of mind when it comes to your high-value breeding stock. That’s where you could opt for livestock insurance to cover your entire stud stock – think stud cattle, goats, rams and ewes as well as alpacas. There’s flexibility to cover them singly or as a herd. Here’s what this extra cover under livestock insurance usually includes:
- Protects you against damage, theft or loss of your stud animals
- Where you’re no longer able to use the sire, ram, etc. due to an accident or illness
- Vet fees
- Accidents
- Third-party liability
- Fertility fees
- Pregnancy and birth
- Early-stage care and equipment
There can be exclusions if the animal dies from old age or disease. The insurance might also not cover death by particular diseases (brucellosis, BSE, swine fever, anthrax, etc.), genetic infertility, a farmer’s wilful neglect or intentional injury. Surgeries that your insurer hadn’t agreed to cover before you took up your policy might also not be covered.
As your broker/advisor, we can customise coverage depending on your animals’ age, risk profile and even geographical location. Often insurers have a dollar limit for the coverage they offer per animal or for the whole flock or herd.
The price to pay
Farming can be highly volatile and risky, but it’s also rewarding. That’s why we help you review your insurance cover, so it’s a perfect fit in changing times. We understand that risk changes from season to season and so can premiums. We’ll look at yield estimates, price and demand forecasts, the agreed excess as well as your operation’s risk profile. Be aware that some insurances can only be taken out at the start of the season.
So, how can producers protect themselves from volatile prices?
You can’t predict when a loss to your livestock may occur and the timing of the loss may impact the farms potential profit margin. An insurance broker/advisor can assist you in determining whether a market value or agreed value livestock policy will best meet your needs and requirements.
