Agribusiness
With improved risk management, food and forestry production will produce stronger results.
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What to Expect in 2025
Runaway costs and labor shortages will challenge profitability across food and beverage production and forestry and wood manufacturing. The industry will also face risk management challenges in the form of climate change, cybercrime and tough underwriting standards. However, industry leaders who embrace forward-thinking strategies can succeed through sophisticated risk management to help manage costs, data analytics to improve benefits engagement and retention and smart use of automation to drive productivity.
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1
Profitability
How will agribusiness deal with increasing costs and outsized risks? Strong risk management.
2
Vitality
Data analytics to develop personalized benefits will boost productivity, recruiting and retention.
3
Resiliency
Risk management solutions will boost resiliency and protect the bottom line.
4
Preparedness
Risk management strategies will help businesses stay prepared to deal with the worst.
How will agribusiness deal with increasing costs and outsized risks? Strong risk management.
1 | Profitability
80%
of agribusiness respondents to HUB International’s 2025 Outlook Executive Survey1 say they don’t have enough insurance to protect profits.
Data analytics to develop personalized benefits will boost productivity, recruiting and retention.
2 | Vitality
weather disasters causing at least $1 billion in damages hit the U.S. between January and August 2024.
Risk management solutions will boost resiliency and protect the bottom line.
3 | Resiliency
Cost pressures will continue in 2025, and agribusinesses are feeling the pinch.
Increasing labor costs2 and changing weather patterns3 are affecting the bottom line. Energy prices are also rising, as power needs are expected to increase faster than inflation.4 And at the same time, commodities prices are falling, especially for corn, wheat and soybeans.5 While many large food and beverage conglomerates are highly profitable, it’s more of a mixed picture for smaller companies.
In the forestry and wood products sector, industry profits are often dependent upon the construction industry, which has struggled with high interest rates, although the outlook for construction is cautiously optimistic. Lumber prices, which have fluctuated wildly in recent years, have stabilized.6
Not all of these challenges is surprising to the industry. According to the HUB International 2025 Outlook Executive Survey, 65% of industry respondents listed greater expenditures as a top concern for 2025 profits, the most commonly chosen reason, ahead of cybercrime, disruption to business operations and climate change.
In the face of these concerns, all agribusinesses will need to take risk mitigation and cost-saving measures to increase profitability. For example, sophisticated inventory management — knowing how much inventory to keep and when to reorder — can make a significant difference in cash flow and profits.
Food and beverage manufacturers can take traditional measures such as futures contracts to help ensure a steady supply of raw materials at a reasonable cost. Forestry operations and wood products manufacturers can improve their risk profiles to cut insurance costs.
And when it comes to insurance, many agribusinesses are underinsured: Eight in 10 agribusiness respondents to the HUB survey say they don’t have enough insurance coverage to protect against risks that hurt profits.
This is likely a result of the rising costs of coverage and shrinking available coverage. Working with an experienced insurance broker in the agribusiness industry can help mitigate premium hikes, secure the right coverage and help boost profits.
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The labor shortage is hitting agribusiness particularly hard. With manufacturing overall adding approximately 3.8 million positions between now and 2033,7 food and beverage manufacturing will need to improve recruiting and productivity to keep pace.
The story is similar in forestry and wood products: The average age of a logging business owner is over 55, and the number of younger people looking to enter the industry is shrinking.8
In addition, these agribusiness jobs can be physically challenging and sometimes dangerous, making it difficult to recruit and retain employees. Increasing wages is only part of the solution, and even then, it doesn’t always produce new employees.
Automation and artificial intelligence (AI) can streamline repetitive tasks on production lines, while helping increase productivity and fill the need for some positions.
But while automation and AI are improving, it’s not always as efficient or accurate as human labor.
What's more, the expense of automation and AI puts it out of reach for many agribusinesses, which have slight margins and little budget for maintenance and repair.
According to the HUB survey, two-thirds of agribusiness industry respondents listed productivity as a top HR priority for 2025, the most commonly selected option.
Agribusinesses can find creative solutions around engagement by leaning into data. Food and beverage production has different challenges than most manufacturers, as turnover can be high and the work seasonal. That demands personalized benefits that produce quality employee experiences (QEX), which helps attract new workers and improve productivity.
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For agribusiness, staying resilient against the complex challenges of climate change, market fluctuations and global disruption is not just a matter of short-term survival, but thriving in the long term.
Climate change is the most obvious culprit. From January through August, 19 weather disasters causing at least $1 billion in damages hit regions across the U.S. The disasters included convective storms, tornadoes and hail.9 And Hurricanes Helene and Milton, which hit the Southeast in late September and early October 2024, each caused damages that could cost $50 billion10 and will affect many industries, including agribusiness.
Not only does climate change harm agriculture, but also puts pressure on food and beverage companies to protect their employees, supply chain, buildings and equipment. Wildfires directly affect forestry and wood production, burning trees and threatening wood mills and other facilities.
Insurance carriers are becoming more stringent on agribusiness underwriting, demanding insureds produce business continuity plans and mitigation strategies before offering coverage. While rates for catastrophic loss are unlikely to come down in disaster-prone areas, operations that take risk management seriously are likely to secure better coverage.
Umbrella and excess liability policies in agribusiness will be up as much as 10% in 2025, and commercial automobile coverage is expected to increase as much as 15%.
There are positive signs. Companies diligent with risk management will have only slight rate increases or declines for commercial property coverage. General liability coverage rates have moderated and should rise only 5% to 10% for 2025 renewals. Rates will rise slightly or decline for stock throughput coverage, as more underwriters have entered the market.
Overall, the limited number of carriers for food and beverage manufacturing means capacity will be reserved for best-in-class risks. Forestry and wood production rates have stabilized, though operations located in disaster-prone areas will have challenges in securing full coverage.
With chaotic weather and new risks emerging, agribusinesses’ resiliency will depend on understanding and dealing with issues before they happen. This has made enterprise risk management (ERM) extremely important.
Whether it’s a meat packing plant, logging operation or bottling factory, agribusinesses need to manage and assess potential risk to stay resilient — working with a broker with wide industry expertise and strong carrier relationships will help develop comprehensive ERM programs and make enterprises far more insurable, safe and resilient.
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According to the HUB survey, there’s wide recognition on the importance of preparation: 67% of agribusiness respondents say their objectives are aligned with risk management and insurance strategies.
However, that doesn’t mean the industry is not without challenges. As automation grows — 60% of food and beverage businesses use technology to help track and manage inventory11 — it has brought up new issues for which businesses need to prepare. And artificial intelligence (AI) to increase efficiency12 is rife with both opportunity and risk.
With automated systems that run production lines, mix ingredients and assure quality control, a breakdown can lead to shutdowns, tainted output and subpar products making it to consumers. In addition, much of the automation in food and beverage manufacturing runs on legacy operating systems, making them particularly at risk. Reducing that risk requires strict maintenance and upgrading operating systems when necessary.
The agribusiness industry is also vulnerable to cybercrime, with 167 ransomware attacks in 2023, with a similar number trending for 2024.13 And its automation is often vulnerable to sabotage.
Agribusinesses can combat cybercrime through multifactor authentication and endpoint detection and response. Educating employees about how to recognize phishing and spoofing attacks is essential.
Supply chains are still fragile, with potential problems coming not only from political unrest and shipping issues14 but also from severe weather. Agribusinesses can take advantage of CAT modeling to develop business preparedness plans in case their supply chains are interrupted.
Food recalls are another area that represents an ongoing double risk. Not only does it affect the bottom line, but it also imperils a food manufacturer’s reputation. Between 2020 and 2023, the number of FDA and USDA food recalls rose 20%, and 2024 is likely to match or exceed the 547 recalls in 2023.
Nearly 40% of recalls are due to allergen contamination, while bacterial contamination accounts for more than 20%.15 Although automation can reduce the risk of recalls, it cannot remove it entirely — organizations need strong product oversight that includes audits to minimize the risk and a food recall plan when it does happen.
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Risk management strategies will help businesses stay prepared to deal with the worst.
4 | Preparedness
Navigating Your Next Steps
HUB agribusiness insurance specialists will work with you to develop a tailored strategy for 2025.
1
Thoughtfully lean into risk.
Risks in agribusiness have increased — and so have insurance premiums. Consider taking a higher deductible on some coverages, which reduces premiums and improves experience rating, or think about alternative risk transfer vehicles to lower costs. Ask your broker what kind of insurance strategy meets your risk profile and budget.
Increase engagement through benefits.
2
Employees expect you to support their health, safety and wellbeing. A benefits strategy based on personalization and fostering quality employee experiences (QEX) will boost engagement, recruiting and retention and lower risk.
Understand the root cause of your large losses and explain to carriers what you’re doing to prevent future losses. Develop a strategy with HUB to determine the best time and frequency to review alternative markets.
Understand your loss trends.
3
Let your broker know what changes you’ve made to the business, so there are no surprises at renewal. Review exposures and insurance needs at least 90 days prior to policy renewal, so your broker can identify the best options.
Be transparent with your broker.
4
Be Prepared
Download our 2025 Agribusiness Outlook and Insurance Market Rate Report to see what to expect in the coming year.
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Meet the Experts
Practice Leader
Agribusiness Practice
Josh Smart
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Scott Rasor
Agribusiness Practice
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Risk Advisor
Eric Lowe
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Jamie Trenter
Agribusiness Practice
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Ken Kessler
Agribusiness Practice
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Sommer Chanady
Agribusiness Practice
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Kaleigh Kemmerly
Agribusiness Practice
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Justin Pretzer
Agribusiness Practice
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HUB Agribusiness
When you partner with us, you’re at the center of a vast network of experts who will help you reach your goals. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB Agribusiness insurance specialist.
About Us
$1.5B
in commercial insurance premium brokered by HUB
38,800
agribusiness clients
84,000
insurance policies managed
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3. Green Money, “Weather’s Impact on Investing in US Agriculture: Navigating the New Normal,” May 2024.
4. Utility Dive, “US electricity prices rise again as AI, onshoring may mean decades of power demand growth: BofA,” July 8, 2024.
5. Euromonitor International, “Commodity Market Outlook Q2 2024: Pressures Have Eased But Geopolitical Flareups Drive Market Volatility,” May 30, 2024.
6. Cision, “US Housing and Lumber Prices Update – July 2024,” July 19, 2024.
7. Deloitte, “US Manufacturing Could Need as Many as 3.8 Million New Employees by 2033, According to Deloitte and The Manufacturing Institute,” April 3, 2024.
8. The Hill, “Jobs in the Woods Act addresses workforce challenges of forestry,” September 10, 2023.
9. PropertyCasualty 360, “U.S. logs 19 billion-dollar climate disasters so far in 2024,” September 10, 2024.
10. AP, “Helene and Milton are both likely to be $50 billion disasters, joining ranks of most costly storms,” October 16, 2024.
11. Grassi, “Food & Beverage Manufacturers and Distributors Drive Profits Through Technology & Automation,” June 6, 2024.
12. ForestNet, “Artificial Intelligence (AI) is Already at Work in the Forest Industry,” April 25, 2024.
13. The Record, “Food and agriculture sector hit with more than 160 ransomware attacks last year,” April 16, 2024.
14. The Food Institute, “5 Supply Chain Concerns to Watch in Late 2024,” August 2, 2024.
15. TraceOne, “States Most Impacted by Food Recalls in Recent Years,” July 29, 2024.
1. HUB’s Outlook Executive Survey polled 900 C-Suite and VP-level executives on the issues facing them on profitability, employee vitality and organizational resilience.
2. University of Illinois Farm Doc Daily, “Rising Overhead Costs Driven by Labor and Interest,” December 19, 2023.
55 years
The average age of a logging business owner.
40% and 20%
The percentage of all food recalls due to allergen contamination and bacterial contamination, respectively.
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