Last year, throughout the winter months and into spring, Edge members dealt with issues from heavy snow loads collapsing buildings to the dumping of milk because milk trucks and tankers were unable to get from the farm to the processing plants during blizzard conditions.
Several years ago, the Edge board explored whether a disaster assistance program was in the best interest of the cooperative. After looking at our internal data and consulting several insurance experts, the board determined we didn’t want to offer a program under false pretenses.
In our research, we discovered that a disaster assistance program was not backed by reinsurance and was completely funded by the co-op itself. In the event of a major disaster, this could bankrupt Edge, and for a smaller, regionalized disaster, the program would result in extremely small, non-impactful payments to our members.
We also recognized that most good farm insurance policies will cover losses in the event of major disasters. More importantly, we recognized that instead of offering this misleading protection, member dollars would be better spent on proactive initiatives and having a stronger impact on dairy legislation in Washington D.C.
Our goal is to support you as you prepare yourself for potential weather-related disasters.
Meet with your insurance agent
Having a great relationship with your agent and asking the right questions is a critical step in making sure your farm is covered for weather-related incidences. Make sure your insurance agent understands your industry and the risks that come with it. Here are some key questions to ask (courtesy of Family Insurance Agency, Seymour, Wis.):
Recent events have put the need for ice and snow coverage at the forefront of insurance policies. If you suffer a snow load collapse, a good policy will pay the actual cash value of the damaged building. Make sure you are insured for the replacement cost. Some insurance companies automatically include coverage for weight of ice and snow in their policies, but most companies require the coverage be added as an endorsement for outbuildings. You will also want to ask if farm personal (cattle, equipment, feed, etc.) is also covered for weight of ice and snow.
Ask about business income and extra expense coverage. Business income is typically used when a dairy’s ability to milk cows is interrupted. Extra expense coverage might include setting up temporary milking equipment, cattle housing, trucking cattle or renting another facility while yours is being repaired. This is a very important coverage. It is recommended that an insured buy enough loss of income coverage to cover three months of milk checks at a minimum.
Blizzard coverage is something to consider for cattle on open lots rather than under a roof. It’s an important endorsement to add when dairies are raising cattle out of state on a feed lot. Adding the blizzard peril provides coverage if cattle are lost in a blizzard event.
Talk to your processor and hauler
Know your processor’s plan in the event of various weather-related disasters. What is their policy for pulling milk trucks and tankers off the roads? How and when will that be communicated? Having a good discussion up front will help you be more prepared.
Consider an investment in additional on-farm storage
After much discussion with farmers and processors, the Edge board determined that the best type of protection came down to additional on-farm storage. What would happen if a milk truck or tanker could not get to your farm for eight, 12 or 24 hours? What is your back-up plan?
Working through various scenarios is your best defense in this situation. Would your processor be willing to provide financial support toward additional storage? Are there cost-share or low-interest loan programs to help offset costs?
Edge is committed to working together with processors and government agencies during these worst-case scenario situations. We are all hoping for a safe and calm winter.