Posted April 18, 2017 by Administrator
Manufacturing fertilizer, like many things, used to be a simpler process – create and distribute high quality organic material for enriching soil. Now fertilizer manufacturers must remain aware of a variety of factors to avoid potential lawsuits, from pollution liability and cyber liability to employment practices liability and beyond.
For example, individuals who live near fertilizer plants may complain of the smell and raise concerns about water contamination from runoff. There are numerous ways fertilizer can damage the environment. To avoid financial ruin, manufacturers need to ensure they have ample insurance to protect their business.
An Overlooked Risk Within the Industry
Many agribusiness companies invest in the standard types of insurance coverage such as farm liability protection or equipment coverage. However, the fertilizer manufacturing industry has one lesser-known risk that business owners cannot afford to disregard: the combustible properties of stored fertilizer and related chemicals.
In the spring of 2013, an explosion at a Texas fertilizer plant proved deadly. While investigators determined the fire was set on purpose, the explosive nature of materials found at fertilizer plants is undeniable. The investigation determined that the company in question, West Fertilizer Company, failed to take proper precautions when storing chemicals at their facility. The company became the target of numerous lawsuits as a result.
While the West Fertilizer Company explosion is a worst-case scenario for businesses, it represents why fertilizer manufacturers cannot afford to neglect known threats. Investing in the right types of insurance can reduce your risk. Cline Wood can help you manage your risk to protect your bottom line. To learn more, contact us.
Posted March 14, 2017 by Administrator
Crop insurance is a vital part of operating a farm. It allows for competition and innovation while offering protection from the unexpected. This way, farmers can stay in business in the event that their crops fail. Many crop insurance policies are customizable, so farmers can shape their policy to address their specific risks. U.S. farmers have two types of crop insurance available to them: Crop Hail Insurance and Multiple Peril Crop Insurance (MPCI).
Crop Hail Insurance
Farmers receive these policies from private insurers rather than the Federal Crop Insurance Program. Farmers can purchase this type of policy at any time during the growing season. Farmers opt to purchase this type of insurance because hail has the exceptional ability to damage substantial sections of planted fields while leaving the remainder untouched. The main purpose of this policy is to safeguard high-yielding crops in hail-prone areas.
Multiple Peril Crop Insurance
Unlike Crop Hail Insurance, farmers must purchase MPCI policies before they begin planting their crops. This type of insurance covers a variety of natural disasters such as:
- Too much moisture
There are only 18 private companies authorized to write MPCI policies under the Federal Crop Insurance Program. The United States Department of Agriculture Risk Management Agency (USDA RMA) regulates the Federal Crop Insurance Program and determines what rates insurers can charge. The RMA also decides which crops these private companies can insure in which parts of the country.
Farmers cannot afford to neglect their insurance coverage. They also need a variety of insurance policies to protect their business. As a leading provider of agribusiness insurance, Cline Wood can help farmers identify risks to their investment as well as provide services tailored to address their specific needs. Contact us to learn more.
Posted February 23, 2017 by Administrator
Many dairy farmers’ top priority is their cows’ projected milk yield. They focus on elements that affect their cows’ health and wellbeing such as preventing common diseases and providing proper housing for the animals. Many are expecting a higher yield of milk by pounds per cow. This is largely due to enhanced nutrient content and digestibility of 2016’s forage crops. However, unexpected challenges threaten this projection.
Harvest Delays and Grain Maturation
The 2016 corn silage and high moisture harvest pose certain risks to dairy farmers. For one, harvesting was delayed. This resulted in the plants and grains maturing past their optimal stages. This contributed to diminished nutrition quality of the harvest, which has a direct effect on dairy cows and their milk output.
There are numerous options available to dairy farmers to combat this issue. Unfortunately, decreased dairy performance is rarely a single-culprit issue. Multiple factors often combine to reduce the animals’ health as well as milk output. Some of these are anti-nutrition factors such as mold, yeast, and toxins.
Other elements are bacteria-based. Sometimes, feed or other toxins found on the farm can overwhelm an already nutritionally deficient cow. Other times, excessive starch in the animals’ diets can create the perfect environment for mold and bacteria to take over in the intestines and hindgut. The best way to avoid this scenario is by dairy farmers, consultants, and trusted veterinarians working together.
Outside factors affecting production is not unique to dairy farmers. Nearly all trades that fall under the agribusiness umbrella will feel the sting of external influences on their bottom line at some point. While these companies can take steps to work together and mitigate these issues, having appropriate insurance is vital. Cline Wood is the paramount provider of agribusiness insurance products. We treat your business as our own and provide customized services to meet your needs. Contact us to learn more.
Posted February 9, 2017 by Administrator
Agribusinesses face a variety of risks that other businesses do not. Some risks, such as events that affect pricing, are the same for all institutions. Other risks are unique to agriculture-based businesses, such as farming. If you own an agribusiness, you need to familiarize yourself with all of the risks that can affect your company. Below are some of the common risk factors farmers face.
Problems with pricing often occur after a farmer has already committed to production. Production is a lengthy process for agribusinesses. For example, farmers must invest in feed and equipment to produce the best possible livestock. It can take months or even years to see a return on their investment. During this period in time, global and local market pricing can shift and have a dramatic effect on farmers’ bottom line.
Agribusinesses face distinctive production risks compared to other industries. Some examples include harsh weather, droughts, insects, and a variety of other environmental factors. These elements are uncontrollable and sometimes unpredictable, which can hinder production output.
Changes to government policies can affect multiple industries. For farmers, the biggest risks come with changes to regulations regarding how they grow their crops and raise their livestock as this can have a significant effect on production costs. Other changes that can affect farmers are rules regarding manure disposal, conservation and land use mandates, or tax law updates.
Agribusinesses cannot afford to ignore these risks. The best way to reduce risk is to invest in the proper types and amount of insurance. To learn more about how insurance can reduce your agribusiness’ risk, contact the experts at Cline Wood.
Posted November 3, 2015 by Administrator
The recent drought conditions have forced some ranchers to sell livestock they would have normally kept for breeding. This can lead to a significant loss for some ranchers who are in extreme or severe drought conditions and can’t replace livestock in the four years that is allowed under current tax laws.
Under 1033 (e)(2)(B), livestock that is sold or exchanged during a drought are considered an involuntary exchange. The IRS has decided that some areas are suffering from such severe drought conditions that exemptions to the standard tax laws should be made. In all 50 states and Puerto Rico, the IRS has designated specific counties to be exceptional, extreme, or severe drought areas. Under the extension, changes have been made to how the government defines the first drought-free year base on three different criteria.
The extension may be able to help you recover financially if you are in a county that has suffered from severe drought. To help you understand how the extension works or if your agribusiness is in a designated county, you will want to visit the IRS website to read the recently released notice. To learn more about agribusiness risk management and best practices, contact us.