Increasing Lamb & Beef Prices Impact Adequacy of Insurance Cover
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The producer price at the end of August 2009 was 326.7 p/kg compared to 290.5 p/kg and 232.7 p/kg at the same point in August 2008 and 2007 respectively.

Many sheep farmers have found that the higher prices more than offset the higher operating costs involved and that they are benefiting from the export market and its positive impact on home livestock prices.

The same trend has been seen in beef farming as prices have increased year on year. The producer price at the end of August 2009 was 276.11 p/kg, up from 270.61 p/kg for the same week in 2008 and 202.22 p/kg for the respective period in 2007.

Naturally, this has had a knock on affect on both commercial and pedigree breeding livestock, which have also seen very buoyant trading over the last 12 months or so.

Whilst the export market and currency fluctuations impact heavily on the price of both beef and lamb and the revenue achieved, the impact on insurance and adequacy of cover should also be considered.

Beef and Sheep farmers finding that their total revenue from beef and lamb production is increasing, as result of higher prices, will need to consider the sums insured under their insurance policies, allocated to livestock and/or revenue, to ensure that cover remains sufficient for the increased value at risk. Such fluctuation in values calls for regular reviews of sums insured to avoid underinsurance and Agrical advises farmers and their insurance advisors to review the adequacy of insurance cover at regular intervals so that levels are set on current values for livestock and potential revenue.

With continuing increase in global trade it is necessary for farmers, their Insurers and Brokers, to be aware of the international factors directly impacting insurance cover and to actively review the value at risk on farm.