INDIANAPOLIS — A new insurance offering could help producers in the event that African swine fever makes an appearance on U.S. soil.
“Interest has definitely been there since ASF started spreading in China. Late last fall, there was definitely interest in the insurance as concern about ASF started growing,” said Chris Moore.
Moore is an insurance broker for ONI Risk Partners, and he specializes in working with livestock producers all over the country.
Moore has been promoting insurance coverage from James Allen Insurance that can insure pork producers for their operating expenses in the event that the unthinkable — ASF entering the U.S. swine herd — would happen.
The ASF policy was created out of similar coverage the company has for porcine reproductive and respiratory syndrome and porcine epidemic diarrhea virus.
“While producers can experience significant production losses from PRRS or PED, a foreign animal disease outbreak would be absolutely catastrophic. It would be devastating if it were ASF, for example. Foot and mouth disease would be devastating to all cloven-hoofed species,” Moore said.
The ASF coverage is expense reimbursement coverage. After the deductible — which is typically one to two months’ worth of expenses, depending on the farm size of the customer — is met, the insurance would then reimburse the producer for the remaining months of expenses.
“The producer will submit the expense receipts to the insurance company and the insurance company will reimburse those expenses back,” Moore said.
He said the coverage is attractive because it insures the expenses on the front end of the production cycle, rather than waiting until pigs are sold.
“Producing hogs is a cost of production business, so our goal is saying, we know if ASF comes in here, we could lose our ability to export product. That is going to impact the value of our end product. So, rather than saying let’s insure the end value, we are going to insure the cost of the process,” he said.
The annual premium for the insurance is $5,000. Moore said the insurance would cover operating expenses including feed, insurance premiums, interest costs, loan payments, medication and veterinary costs, mortgage payments and property taxes, payroll and payroll taxes, and waste removal costs.
Moore said that while the ASF coverage is primarily aimed toward pork producers, allied industry professionals and businesses also could be covered.
“If I own a feed mill and I supply feed to three pork producers in my area and those pork producers go out of business due to a catastrophic foreign animal disease, that can impact my business. So, this can also help anyone who supplies the pork industry,” he said.
The first ASF policy was sold in October 2018, and Moore said interest in the ASF insurance has remained steady.
“We field calls every single day about it,” he said.
Article Written By:
815-223-2558, ext. 211
Follow her on Twitter at: @AgNews_Otto
May 1, 2019