Tresidders was pleased to support client Australian Eggs with a risk management and insurance update on Salmonella Enteritidis (SE) for its industry magazine, Eggstra! Australian Eggs is a member owned not-for-profit company providing marketing and research & development (R&D) services for the benefit of Australian egg farmers.
See below for the article and as always, if you have any questions or concerns about you risk management and insurance programme, please do not hesitate to contact us.
Salmonella Enteritidis (SE) risk management and insurance update
By Luke Chrzanowski, Tresidder Insurance Brokers
Salmonella Enteritidis (SE) has caused some horrific outcomes for the poultry industry. It has been reported that at least 11 properties were affected in the past year, resulting in the destruction of thousands of chickens and eggs.
In addition to the need for birds to be culled and sheds cleaned, in some cases it’s not possible to be completely rid of the disease, in which case the farm would never be able to operate as a poultry farm again.
Managing SE risk
The best way to manage SE risk and prevent an outbreak or spread of an outbreak is through biosecurity measures. Australian Eggs has put out a comprehensive biosecurity manual and by adopting the framework and principles from the manual can protect your farm.
One of the issues with SE risk is that the disease can be brought in by birds flying over the farm, defecating and spreading bacteria which can be difficult to prevent, particularly in free range operations. Another risk that impacted many properties in the recent outbreak were linked through the movement of people, eggs or equipment.
How insurance responds to SE
The more effort you put into prevention, the better placed you are. Additionally, there are elements of the disease that are insurable, at varying price points, that can act as a safety net. For example, a recall insurance policy can cover the cost of recalling, destroying and replacing the eggs if a virus is identified, as well as loss of revenue as a result of the recall. There is also an option of livestock insurance, with specific disease cover.
Recall insurance is relatively affordable, and most good farm operators would have it in place. Basic livestock cover is readily available, but to expand that to include disease cover can become quite cost prohibitive. In addition, the drought has significantly increased the cost of feed, and egg farmers now face the cost of even higher biosecurity measures.
Currently there is an insurance cover in place for protection of avian influenza by the government, but it specifically doesn’t cover this strain of Salmonella. We join the industry in encouraging the government to extend the current programme to include these more unique and exotic diseases that are now eventuating into Australia.
The downfall of the current programme is that the avian influenza (AI) cover the scheme provides only insures the cost of the birds, and not the loss of revenue. The time it takes, from verification of AI, quarantine, confirmation that the farm is again disease-free, and reorder of birds, gestation and rearing is typically five months minimum. This can cause significant disruption and impact to your operation. Some people reorder their birds before they receive confirmation that the farm is cleared of disease, hedging on getting the farm clean by the time they’re ready, which can either pay off or put the operation at greater financial risk.
Protect the future of your farm
Rather than gambling with your farm’s future, we would recommend three key actions. First, invest in the risk management and biosecurity of your operation. Secondly, encourage the government to put in place measures to protect the future of the industry. And lastly, speak to your insurance broker and ensure you have the right insurance solution in place.