The recently discovered case of bird flu in commercial chickens in Wisconsin has led to the slaughter of nearly 2 million turkeys nationwide, and has once again highlighted the importance of livestock and business interruption coverage as part of a strong agribusiness insurance portfolio.
Roughly 1.8 million turkeys were killed in different parts of the country this week in an effort to stave off the spread of the virus, which was confirmed Monday. The case of a Wisconsin commercial chicken infected with bird flu represents the first US case of the new, highly contagious virus.
Commercial birds in seven states are thought to have been infected with H5N2, including Wisconsin, Minnesota, Iowa, Arkansas, Missouri, North Dakota and South Dakota.
The commercial effect on agribusiness in these states will likely be great. According to a US News report, Minnesota alone has lost 1.5 million turkeys to the disease – already a significant portion of the 46 million turkeys raised in the state’s 22 farms each year.
In Iowa, 130 farms raise approximately 11 million turkeys annually. It is also the nation’s leading egg producer, with more than 59 million egg layers.
This strain of bird flu is said to be dangerous to all commercial poultry, and already, some 40 countries have imposed restrictions on US imports to prevent the spread of the disease.
For insurance producers working in the agribusiness sector, the outbreak means a good opportunity to revisit clients’ insurance portfolios to ensure limits on livestock insurance are adequate and policies are up to date.
Animal mortality insurance obtained through a private carrier could also come into play, as it covers the market value of livestock killed in government-enforced culling. However, mortality is only generally taken out on high value livestock such as prize stud bulls.
Additionally, if the case of the mad cow disease crisis of the early 2000s is any guide, livestock producers who have failed to take out mortality insurance prior to the outbreak could be out of luck.
Business interruption policies may also come into play if the outbreak spreads, as could loss of income coverage.
Litigation is also almost certain if any of the infected livestock works its way into the food supply – though scientists say this particular strain of avian flu is not dangerous to humans.
