By Jean Arnott-Glennie, Farms & Estates Account Executive
With the arable harvest well underway, farmers will have been scrutinizing every weather forecast for favourable conditions. Whilst most of the winter crop was early and cut as the weather held, many of the spring croppings were spasmodic. As a result, the combine harvesters were playing catch up with many of the fields ready for harvesting. Any delay at that stage affects the quality of the grain and its financial value.
The arable harvest is the annual income for a lot of farmers, and for livestock farmers, this grain is the basis of their feed regime for the coming winter. Alongside the grain, considered by some to be a by-product, is the straw. 2018 saw great shortages of straw due to the dry weather conditions and as a result, the price to buy in rocketed up. Farmers selling straw were able to maximise their profit. Yet those buying had to weigh up the cost of keeping the cattle, against their shrinking profit margins. For some, this meant the end of that type of farming. Other livestock farmers have weathered this storm and are welcoming the cost of fodder returning to pre-2018 prices.
From an insurance perspective, these sums insured can have an impact on the levels of cover required. In particular, the annual farm insurance premium. Last year, the cost of replacing fodder increased and subsequently the sums insured rose too. It’s essential to ensure the right amount of cover is in place if these crops suffer any form of damage.
If this process is not followed there could be a situation of underinsurance and a penalty to the farmer imposed on any claim settlement. The same situation can arise if the turnover is actually higher than in previous years. The farm turnover is one of the main rating factors for public liability cover for farming insurance. Again, if the sums insured declared are significantly lower than the actual value, then it could impact on any claims settlement.
2019 has seen the market prices for both grain and fodder reduce compared to last harvest season. As a result, any increases to the sums insured applied in 2018 may not now be appropriate. Monitoring the performance of grain and fodder trades via the maltsters, local marts and other suppliers ensures that we can follow the market trends. It's essential for us to understand the costs and sales of various agricultural commodities in order to do our work to the highest standard.
By meeting with our farming clients, discussing their plans and reviewing the insurance covers on a regular basis, Bruce Stevenson Insurance Brokers is able to ensure adequate and bespoke levels of cover are always in place. Discover more of the specialist Farms and Estates services we offer.