As uncertainty
roils agribusiness,
risk management
will harvest success.
Learn about agribusiness market trends and insurance rate changes for 2023.
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Agribusiness
HUB 2023 Outlook
What's covered...
Setting the Scene
What to Expect in 2023
Make a Plan
About HUB
Profitability
Vitality
Resiliency
Safety and Security
Protect employees
Emphasize safety
Meet the Experts
HUB Agribusiness
Setting the Scene
Expect more shortages and rising prices.
Agribusiness must deal with risk perhaps more than any other industry. Soaring input prices, record drought, staff shortages and increasing cyber risks are pressuring profitability, vitality and resiliency.
What to Expect in 2023
Farms and food manufacturers will need to manage costs while remaining flexible enough to harness market trends, using strategies like double cropping and commodities futures. Given the additional risks of long-term drought and chronic labor shortages, a best-in-class risk management and insurance strategy — and nimble HR — will be key for agribusinesses to thrive in 2023.
Make a Plan
Download our 2023 Agribusiness Outlook and Insurance Market Rate Report to see what to expect in the coming year.
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Be Prepared
Emphasize onboarding and training.
Employees expect you to support their health, safety and wellbeing. Give them the ability to personalize their benefits without increasing costs. HUB’s QEX approach will give you a competitive advantage.
Understand your loss trends.
Close claims quickly at the lowest possible cost.
Protect employees.
Protect employees.
With many employers hiring less-experienced workers, it’s more important than ever to focus on onboarding and training to set the right expectations and avoid costly accidents.
Emphasize onboarding and training.
Understand the root cause of your large losses and explain to insurance 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.
Understand your loss trends.
Close claims quickly at the lowest possible cost.
Protect employees.
Emphasize onboarding and training.
Close claims quickly at the lowest possible cost.
Claims that take months or years to resolve will affect your long-term loss experience. Ask your broker for a claims management specialist who can help close claims quickly and with the best possible outcome.
Protect employees.
Emphasize onboarding and training.
Close claims quickly at the lowest possible cost.
Understand your loss trends.
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Be prepared.
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Meet the Experts
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Agribusiness Practice
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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.
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double cropping, which the U.S. Department of Agriculture is promoting through relaxed rule changes in response to the wheat shortage.
Vertical integration and commodity futures are time-tested ways to help tame input costs and improve efficiency. But many threats to profitability in 2023 will be largely out of producers’ control, requiring strong risk management, insurance and financial strategies to remain profitable.
Managing input costs and risk will drive profitability in 2023.
There are obvious culprits for price spikes of inputs and product costs: Russia’s invasion of Ukraine in February 2022 and China’s zero-COVID policy exacerbated global supply chain disruption with sharp reductions in fertilizer, seed and fuel production.
Food prices jumped nearly 11% in July 2022, the highest year-over-year increase since 1979. A likely drop in the global wheat harvest due to the war in Ukraine — which produces 20% of the world's high-grade wheat and 7% of the global total — will exacerbate price hikes, stunting demand.
Staying profitable in this environment demands flexibility. Farmers in hundreds of Midwestern counties growing soybeans and sorghum are
1. Bloomberg, “Food Prices in US Surge Most Since 1979, Keeping Cost of Living High,” August 10, 2022.
Safety and Security
Resiliency
Vitality
Profitability
Safety and Security
Resiliency
Vitality
Profitability
Agribusinesses are also re-evaluating their compensation and benefits packages. It’s important that companies re-examine cost-savings strategies in medical coverages and reallocate dollars to the benefits that are most important to employees.
Leveraging data to create personalized benefits may seem out of reach for many businesses. But rethinking and personalizing benefits based on employees’ unique needs will result in a quality employee experience (QEX) that attracts and retains workers.
Investing in employees will help tame the
labor shortage.
As workers have re-evaluated their priorities and goals in light of the COVID-19 pandemic, agribusiness, like many industries, has had difficulty in recruiting and retention.
Although the pandemic’s direct impact on labor has largely subsided, the aftershocks remain. About 58% of food manufacturers report a labor shortage, up from 50% a year earlier. These shortages are likely to continue throughout 2023.
To lower turnover and lower the number of workplace injuries, agribusiness will need to emphasize worker training and onboarding.
That will also help lower workers’ compensation insurance rates and medical costs long term.
4. Food Engineering, “The State of Food Manufacturing in 2022,” July 6, 2022.
Take steps to make yourself a better risk
Take steps to make yourself a better risk
Take steps to make yourself a better risk
Take steps to make yourself a better risk
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Take steps to make yourself a better risk
Conduct due diligence
Create a strategy for protecting personal property
Explore insurance alternatives
Take steps to make yourself a better risk
Safety and Security
Resiliency
Vitality
Profitability
In addition, underwriters are inspecting industrial control systems before offering coverage. Without such controls set properly, food manufacturers can face substantial damage to the manufacturing line.
Given this environment in 2023, staying resilient is directly tied to proper risk management. The cost of crop insurance will increase, as premiums are directly related to commodity prices. Farmers need to determine the level of risk they’re willing to tolerate in an era of more catastrophic weather events. For agribusinesses as a whole, rates will rise across the board, with particular pressure on excess liability coverage, property and cyber liability coverage.
Managing catastrophes, COVID, consolidation and control systems.
Severe weather is occurring with greater frequency and impact, and 2023 will continue that trend. Nearly three-quarters of American farmers say crop yields have fallen due to drought.
Climate change-related storms, heatwaves, droughts and wildfires remain a challenge for farmers and food manufacturers, which must anticipate and manage these risks to remain viable. Additional risks include possible business closures from new COVID-19 variants. Tightening credit markets are likely to strain an agribusiness’ finances, which may lead to business closures and industry consolidation.
6. Forbes, “U.S. Farmers Struggle Through Drought To Bring Food To The Table But Face More Challenges Ahead,” September 2, 2022.
Safety and Security
Resiliency
Vitality
Profitability
Food recalls will remain a major risk for food manufacturers, especially for food contaminated with allergens. Of 146 food recalls in the second quarter of 2022, approximately 40% were due to allergens.
Assess and address your areas of greatest risk. Protect food and beverage systems from cyberattack, and be prepared for cyber coverage rate increases of 10% to 20% in 2023. Product recall insurance and product liability coverage can protect food manufacturers from costs related to product recalls and liabilities, which can run into the millions of dollars.
Protection will yield results against cybercrime and safety risks.
Cyber risks will continue to be a critical security concern. Both on the farm and in the factory, agribusiness has turned to automation to cope with labor shortages and improve quality.
However, this shift has increased exposure to cyber risks, as bad actors can potentially hijack manufacturing equipment, farm machinery or computer networks. Risks include reputational damage, the financial loss of a ransomware attack and production downtime in the event of a manufacturing shutdown. Food safety also becomes an issue with cyberattacks.
Monitoring control systems, employee cybersecurity training, adoption of multi-factor password authentication and cyber insurance can help manage cyber risk.
7. Food Industry Counsel, “2022 Recalls,” accessed September 29, 2022.
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HUB agribusiness specialists will work with you to develop a tailored strategy that will protect the bottom line, support your workforce and build resiliency for 2023.
Here are some initial considerations:
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HUB agribusiness specialists will work with you to develop a tailored strategy that will protect the bottom line, support your workforce and build resiliency for 2023.
Here are some initial considerations:
See more
Understand loss trends
Close claims quickly
10.9%
Food prices rose
in July 2022, the highest year-over-year increase since 1979.
2. The Washington Post, "Ukraine’s wheat harvest, which feeds the world, can’t leave the country," April 7, 2022.
3. AgriPulse, “USDA approves expanded double cropping in bid to increase production,” July 12, 2022.
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5. HUB International, “Voluntary Benefits Help Counter Worker Shortages in Food and Beverage,” April 5, 2022.
Percentage of food manufacturers reporting staffing shortages:
50%
58%
2021
2022
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Safety and Security
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Vitality
Profitability
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Vitality
Profitability
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Resiliency
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Profitability
Practice Leader
Josh Smart
Agribusiness Practice
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Expert
Ryan Matthews
Agribusiness Practice
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Scott Rasor
Agribusiness Practice
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Risk Advisor
David Laks
Agribusiness Practice
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Practice Leader
Agribusiness Practice
Josh Smart
Linkedin Profile
Ryan Matthews
Expert
Agribusiness Practice
Linkedin Profile
Scott Rasor
Expert
Agribusiness Practice
Linkedin Profile
David Laks
Risk Advisor
Agribusiness Practice
Linkedin Profile
Practice Leader
Agribusiness Practice
Josh Smart
Linkedin Profile
Ryan Matthews
Expert
Agribusiness Practice
Linkedin Profile
Scott Rasor
Expert
Agribusiness Practice
Linkedin Profile
David Laks
Risk Advisor
Agribusiness Practice
Linkedin Profile
Practice Leader
Agribusiness Practice
Josh Smart
Linkedin Profile
Ryan Matthews
Expert
Agribusiness Practice
Linkedin Profile
Scott Rasor
Expert
Agribusiness Practice
Linkedin Profile
David Laks
Risk Advisor
Agribusiness Practice
Linkedin Profile
7
HUB
HUB
Food prices rose
in July 2022, the highest year-over-year increase since 1979.
10.9%
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Bloomberg, “Food Prices in US Surge Most Since 1979, Keeping Cost of Living High,” August 10, 2022.
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