Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
1
Thursday, September 24, 2015Des Moines, IA
3:30–5:00 p.m.
POULTRY OPERATIONS
Presented by
Robin Souza, CPCU, CRM, CIC, AFIS, AINS, AICRegional Agribusiness Specialist
ACE Agribusiness
This breakout session will focus on poultry coverage and risks associated with hatcheriesor growers. Valuation, power interruption, buildings, loss of income, and coverage in tran-sit will be highlighted. Specifics and demographics about the poultry industry will be dis-cussed, as well as underwriting guidelines and the avian flu and its impact on the industry.
Copyright © 2015 International Risk Management Institute, Inc.
www.IRMI.com
2
Notes
This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.
3
Robin Souza, CPCU, CRM, CIC, AFIS, AINS, AICRegional Agribusiness Specialist
ACE Agribusiness
Robin Souza is regional agribusiness specialist with ACE Agribusiness. Prior to joining ACE, shewas lead commercial/ag underwriter with QBE North American, where she was responsible forthe commercial and ag underwriting team, new business production and renewal retention foran assigned territory, and training of current and new personnel, including assistance in develop-ment of workflow processes and guidelines.
Prior to joining QBE, Ms. Souza was regional underwriting vice president/underwriting managerfor Sequoia Insurance Company, agricultural underwriter with Allied Insurance/Nationwide andAllied/CalFarm Insurance, agriproducts underwriter with Commercial Union Insurance Compa-nies, and underwriter for livestock mortality and farm with Hartford.
Ms. Souza holds the Chartered Property Casualty Underwriter (CPCU), Certified Risk Manager(CRM), Certified Insurance Counselor (CIC), Agriculture and Farm Insurance Specialist (AFIS), andAssociate Insurance Services (AIS) designations. She was named Rookie of the Year by the Insur-ance Women of Fresno in 2014.
4
Notes
This file is set up for duplexed printing. Therefore, there are pages that are intentionally leftblank. If you print this file, we suggest that you set your printer to duplex.
PoultryExposures and Insurance
Subtitle
Presented byRobin Souza, CPCU, CRM, CIC, AFIS, AINS, AIS, AIC
PoultryPoultry Risks
2
5
Poultry Poultry operationsMost popular of the poultry operations would be chickens and turkeys:
o Egg productiono Bird productiono Meat production
However, poultry operations can also be ducks, geese, game birds, squab, exotic birds, pets, etc.
3
Poultry Poultry operations: end use Meat Eggs—whole or liquid Manure for soil amendment Vaccine development
4
6
Poultry: Vocabulary• Chicken is singular; chickens is plural• Chick = young (baby) chicken• Pullet = immature female chicken• Cockerel = immature male chicken• Hen = adult female chicken• Cock/Rooster = adult male chicken• Broiler = young chicken raised for meat • Capon = castrated male chicken (requires surgery since the
reproductive organs are internal)http://afspoultry.ca.uky.edu/extension-poultry101 5
Poultry Industry: United States• The US poultry industry is the world’s largest producer, its second-
largest exporter of poultry meat, and a major egg producer. • US consumption of poultry meat (broilers, other chicken, and turkey)
is considerably higher than beef or pork but less than total red meat consumption.
• The poultry and egg industry is a major user of feed grains.
Source: NASS.USDA.GOV.
6
7
Poultry Industry: United States• US poultry meat production totals over 43 billion pounds annually.
Over four-fifths is broiler meat.
Most of the remainder is turkey meat. A small fraction is other chicken meat.
• The total farm value of US poultry production exceeds $20 billion.
• Broiler production accounts for the majority of this value, followed by eggs, turkey, and other chicken.
Source: NASS.USDA.GOV.
7
Poultry Statistics 2013Top 5 Poultry States: Broilers1. Georgia 1,334,600,000 Head: $4,609,963,000 Value2. Alabama 1,048,600,000 Head: $3,558,553,000 Value3. Arkansas 996,400,000 Head: $3,622,910,000 Value4. N. Carolina 785,500,000 Head: $3,570,128,000 Value5. Mississippi 734,000,000 Head: $2,713,304,000 Value
www.uspoultry.org/economic_data/
8
8
Poul
try S
tatis
tics
2013
9
9
Poultry Statistics 2013Top 5 Poultry States: Eggs1. Iowa 14,815,000,000 Eggs: $1,071,252,000 Value2. Ohio 7,988,000,000 Eggs: $574,767,000 Value3. Indiana 7,375,000,000 Eggs: $544,639,000 Value4. Pennsylvania 7,365,000,000 Eggs: $581,124,000 Value5. Texas 5,035,000,000 Eggs: $466,669,000 Value6. California 5,050,000,000 Eggs: $380,038,000 Value
www.uspoultry.org/economic_data/10
10
11
11
Poultry Statistics 2013
Poultry Statistics 2013Nationally, Indiana ranks:• First in duck production (the two largest companies in the Americas
are headquartered in Indiana)• Third in egg production• Third in turkey production
http://www.inpoultry.org/indianapoultryindustry.cfm
12
Poultry OperationsPoultry ops: egg collection• Purchase egg layers (chicks) within 1 to 2 days of hatching.• Pullets are raised until 10–15 weeks in age and then moved to a layer
facility.• Hens begin laying eggs around 18–22 weeks; they will reach peak egg
production around 30–32 weeks in age.• Majority of hens are between 100 and 130 weeks of age when they
have reached the end of their egg production cycle.
13
12
Poultry OperationsPoultry ops: egg collection (cont’d)• In layer facilities, there are two primary methods for collecting eggs—
(1) in-line facilities or (2) off-line facilities.• Hens lay their eggs onto an angled wire floor where the eggs roll to the
front of the cage onto a nylon belt.• Eggs are moved to either an egg processing facility or a storage cooler. In-line facility: eggs are processed on the premises
Off-line facility: eggs are cooled/stored and then shipped to an egg processing facility
14
Poultry OperationsPoultry ops: bird production• The poultry industry breeds birds for both egg (layers) and meat
(broilers) production. • Operation is similar to egg production, but once the eggs are laid,
they are not sold for human consumption.• Eggs are incubated for about 21 days until hatching. • Chicks are then sexed if bred for egg production; if meat production,
sex is not an issue.• Sold and shipped to customers
http://www.poultryhub.org/production/industry-structure-and-organisations/poultry-breeding/commercial-poultry-breeding/ 15
13
Poultry OperationsPoultry ops: meat (broiler) production• Chicks are delivered within 1 day of hatching• Chicks are then placed in a poultry barn for raising to slaughter weight By raising chicks in a poultry barn, the light, ventilation, and feed can be
controlled.
• Ready for slaughter between 5 and 7 weeks• Shipped to contracted processing facility
16
Poultry UnderwritingWhat does an underwriter think of when you say
poultry operation?
17
14
Poultry UnderwritingWhat to consider when reviewing a poultry risk• Most poultry operations are located outside city limits on acreage with
multiple poultry houses for production of birds or eggs. • There may be dwellings occupied by the named insured or employees.• Grain/feed storage tanks • Multiple poultry barns
18
Poultry UnderwritingPoultry risk considerations (cont’d)• Farm machinery to maintain the poultry houses and/or spread
chicken manure. • Liability Selling birds, eggs, meat, manure, etc.
• May also include trucks/trailers to use to move birds and/or eggs• Umbrella limits
19
15
Poultry Underwriting
Type of operation OwnershipExperienceFinancialsLoss history
ConstructionAgeProtectionExposureRisk managementInsurance to value Rate
Risk Review
20
Poultry UnderwritingOwnership • Entity type• Commercial grower Foster Farms, Tyson, Zacky, etc.
Experience • Number of years in operation• Recent change in type of operation• Change in ownership or management• Internet search
21
16
Poultry UnderwritingFinancials • Dunn and Bradstreet report • Bankruptcies
Loss history• Current loss runs from prior carrier(s) 3–5 years
The more years, the better!
22
Poultry UnderwritingConstruction• Wood or metal buildings• Age of buildings• Updated Heating, electrical, plumbing, ventilation, etc.
• Roof material and age
23
17
Poultry UnderwritingProtection• Paid public fire station within 5 miles As most poultry operations are outside city limits in rural areas
• On-site protection Fire protection, water, fire extinguishers, alarms
• Water availability Wells, fire department hookups, canals, lakes, ponds, etc.
Security Cameras, alarms, fenced, restricted access
24
Poultry UnderwritingExposure (surrounding area)• Storage areas Grain/feed, propane tanks, fuel, machinery
• Public access Can the buildings be seen from the road, restricted access
• Security Fenced, gated, surveillance, on-site residency
25
18
Poultry UnderwritingRisk management • Safety program in place• Catastrophe plan• Housekeeping: premises and buildings• Maintenance schedules• Bird disposal• Rodent/pest control• Controls regarding access to premises
26
Poultry UnderwritingInsurance to value• Poultry barns • Employee housing
Minimum 80 percent insurance to value, preferably 100 percent for replacement cost
Most poultry barns are written actual cash value
27
19
Poultry UnderwritingPerils of concern• Fire Due to the nature of the operation
High accumulation of dust
Electrical can be compromised due to age, use, rodents, wear and tear, etc.
• Wind Poultry barns are long narrow structures, generally with roofs made of
sheet metal panels. Weather fluctuations and wear and tear can cause panels to lift.
28
Poultry UnderwritingPerils of concern • Vandalism and malicious mischief Poultry risk can be targeted by animal rights groups Due to rural location, those who wish to vandalize can do so with
minimal risk of being seen“Nearly 1,000 Chickens Killed With A Golf Club At Foster Farms Plant In California” The Huffington Post, Ed Mazza (10/01/2014)
“Animal Rights Group ‘Liberates’ Chickens” The New York Times
29
20
Farm PropertyLocation, Location, Location
Where is the property located?
• Farm risks will consist of acreage usually located outside city limits (rural)—ag land, foothills, mountain, coastal, etc.
Located near residential or school?
Like operations surrounding?
Brush area?
30
Poultry IssuesModern poultry production occurs primarily in enclosed buildings to protect the birds from weather, predators, and the spread of diseases from wild birds. This has allowed farmers to greatly increase production efficiency while significantly reducing the amount of labor required. As with pork production, this has resulted in environmental challenges with production of larger volumes of manure in much smaller areas.
www.epa.gov
31
21
Poultry IssuesOdor and air emissions Air quality concerns are a major environmental issue for not only poultry operations, but most Confined Animal Feeding Operations.• Consider the type of operation (poultry, cattle, swine)• Manure storage and management• Housekeeping• Land applications of manure• Surrounding area
32
Poultry IssuesBiosecurity breaches A breach occurs when a disease-causing organism is introduced to the flock, by a variety of ways: Birds within the flock or recently acquired from another flock Eggs from infected breeder flocks Human transmission by feet, hands, or clothes Dust, feathers, and manure on equipment and supplies Feral birds, predators, rodents, and insects Feed contaminated 33
22
Poultry IssuesCalifornia: Proposition 2 Proposition 2, or the Standards for Confining Farm Animals, was on the November 4, 2008 ballot in California as an initiated state statute, where it was approved.
Proposition 2 created a new state statute that prohibits the confinement of farm animals in a manner that does not allow them to turn around freely, lie down, stand up, and fully extend their limbs. The law is set to go into full effect on January 1, 2015.
Voters in other states had previously voted to eliminate calf and pig crates, but Proposition 2 in California in 2008, was the first time voters were asked to eliminate the practice of confining chickens in battery (small, confining) cages.
www.ballotpedia.org
34
Poultry IssuesProposition 2 (cont’d)
• Apply to all eggs sold
• In the aftermath of Proposition 2’s victory, California state assemblyman Jared Huffman has introduced a bill in the state legislature that would require that Prop 2’s provisions apply to all eggs sold in the state, regardless of where the eggs are laid.
www.ballotpedia.org
35
23
Poultry IssuesBird flu strikes second California poultry farmDon Jenkins, Capital Press - Published: February 16, 2015 9:30AM
A second California commercial poultry farm has been stricken with highly pathogenic bird flu. It’s the farthest south the virus has surfaced yet.The USDA reported to the World Organization for Animal Health that the outbreak began Feb. 2 with an increased mortality among chickens.The virus was confirmed Feb. 12, and the premises were quarantined. The flock included ducks, according to a report posted by the Organization for Animal Health.Canadian authorities reacted Friday by banning poultry raised, processed or shipped from California. Hong Kong banned poultry from Kings County. China and South Korea have enacted bans on U.S. poultry in response to previous cases.Bird flu has infected wild birds, non-commercial flocks and a game bird farm in Washington, Oregon, Idaho, Utah, California and Nevada since mid-December.The only previous commercial poultry flock infected in the U.S. was a 145,000-turkey Foster Farms operation in Stanislaus County. The virus was confirmed there Jan. 23. 36
Poultry IssuesAvian (bird) flu: where did it come from?Wild birds are affected by multiple number of flu viruses, just as humans and other animals are, but the viruses are usually exclusive to birds.The virus can, however, infect humans if they mutate. The first case of a person dying from avian flu was reported in Hong King in May 1997. Prior to that case in 1997, Avian influenza in humans usually caused only mild symptoms, such as pink eye.
37
24
Poultry IssuesA new strain: avian influenza A (H7N9)Human infections with a new avian influenza A (H7N9) virus were first reported in China in March 2013. Most of these infections are believed to result from exposure to infected poultry or contaminated environments, as H7N9 viruses have also been found in poultry in China. While some mild illnesses in human H7N9 cases have been seen, most patients have had severe respiratory illness, with about one-third resulting in death.
cdc.gov
38
Poultry: Questions
39
25
Poultry: Thank you!
Robin Souza, CPCU, CIC, CRM, AFIS, AINS, AIS, AIC
Contact Info:
(559) 313–8199 or [email protected]
40
26