By Aaron Passey
Sharemilking has been a cornerstone of the New Zealand dairy industry for over a century and the life of a sharemilker very likely will have its ups and downs. Making sure you have the right insurance cover in place can smooth out some of those bumps, especially when it comes to protecting yourself, your family and your business.
When it comes to sharemilking your three most important assets are firstly yourself (and any other people involved in your operation), your tools and of course your milk.
Take any of these out of the equation and you’re looking at some pretty serious challenges to your income so having the right insurance cover is critical to your business and your wellbeing.
Rural insurer FMG has a treasure trove of claims data that highlights some of the key challenges faced by sharemilkers and some key pieces of advice.
As a contract milker/variable order sharemilker you are normally the key person in your business, not only as the business owner/operator but also a very busy and key labour unit. Investigating options to have yourself covered should you or your partner fall ill and not be able to work, may help you employ an additional labour unit to cover you while you recover or to at least see out the season.
This can be a challenging task and sometimes it pays to get a hand in working through this. FMG’s Life & Health Advisers can help. Putting aside just 15 minutes to have an initial chat with one could be the best business decision you make. FMG’s advisers can tailor a plan to suit you, your business and family.
I knew milk contamination was a big deal but when I caught up with Angela Hogg, FMG Advice Services Manager, it was worse than I realised, “Almost 30% of milk claims received by FMG are due to contamination so it’s an important one to look out for,” she said.
“Antibiotic contamination occurs throughout the year; but our data shows antibiotic claims peak early in the season when the risk of mastitis is higher.”
FMG recommends using DairyNZ’s MRS T (Mark, Record, Separate, Treat) process to reduce the chance of antibiotic contamination happening in your vat.
Now critical to all of this and the source of your income is your milk. FMG recommends regularly checking and updating the sum insured value of your milk policy to reflect any changes in your operation and milk supply agreement. This is to help ensure that should anything go awry you‘ve got enough cover to keep operating.
When you’re insuring you milk there are four key benefits available.
- Accidental loss automatic benefit.
If you insure your farm milk, this automatic benefit provides cover for accidental loss to your farm milk, for example, forgetting to turn the tap off on the vat and the milk goes straight down the drain.
- Prevention of access optional benefit
Provides cover for your loss of profit when your farming operations are interrupted or interfered with as a direct consequence of damage to property, roads or bridges in the vicinity of your farm, provided this prevents access to the farm. Cover is limited to a maximum of $10,000 any one event.
- Non-collection of farm milk optional benefit
Cover for when your farm milk cannot be collected from the farm vats because the farm cannot be accessed due to accidental loss (caused by a natural disaster, storm or flood only) to property, roads, or bridges in the vicinity of the farm.
- Accidental Spoilage or accidental contamination optional benefit
Spoilage is when milk must be dumped due to an accident to refrigeration machinery or from a sudden power failure.
Contamination is when the milk is contaminated by a substance consumed by the herd, or a substance enters the vat and results in the milk being unfit for supply.
A limit of two claims per period of insurance applies.
Get the right cover in place and you’ll sleep easy ahead of those early mornings knowing FMG is there supporting you every step of the way.