What continued farm industry consolidation means for insurance

The 2022 U.S. Department of Agriculture (USDA) Census of Agriculture — released in February 2024 — showed a continued trend that’s likely to remain a variable influencing your customers well into the future. With U.S. farms, the big are getting bigger.

All signs point to continued growth and consolidation

The latest Ag Census — conducted every five years by USDA — shows:

• The number of U.S. farms decreased 6.9% from 2017 to 2022.¹
• However, average farm size (in acres) increased 5% from 2017 to 2022.¹
• Farms with more than 5,000 acres now control 42% of all the nation’s farmland, another increase since the previous Ag Census release.¹

These numbers further validate the consolidation and growth of farms, with larger farms continuing to grow their overall share of U.S. production.

What this means for farm insurance

As consolidation continues to alter the farm and ranch landscape, here are a few things you should consider when working with large or growing farm customers.

Workforce safety priorities

Larger operations require larger workforces. As they grow, so will the risk of employee injury. This means increased attention to business-wide safety protocols and things like employee training and education to ensure those protocols are followed.

Diversifying farm output

Larger farm operations are more likely to offer diversified products or services. Direct-to-consumer products and agritourism are two areas that open new revenue opportunities for large farms. But those types of ventures also open new potential liabilities.

Larger vehicle and equipment fleets

This adds a new layer of potential liability for growing farms. Specific attention is needed to manage the risk of operating a larger fleet of trucks or field machinery like sprayers, planters or combines. Telematics systems can help monitor and protect drivers and vehicle fleets by providing real-time location and performance data.

Use of digital tools

With increased use of digital tools comes increased risk of cyberattacks. Such digital attacks like ransomware and phishing call for the right insurance products, like cyber liability coverage. Ensuring your customers are protected from this rising threat can help ensure beneficial long-term relationships.

Changing coverage limits and policy needs

As farms scale up, the value of farm property will also rise. Whether that’s adding more trucks to the fleet, constructing new buildings, adding to the herd or purchasing more equipment, coverage limits may need to adjust. Stay connected with customers to make sure they have the right policies and coverage limits in place as they grow. Ensure you have presented and explained the necessary endorsements for things like equipment breakdowns and pollution liability.

Protect large farms with confidence

As you work with large and growing farm customers, make sure they’re prepared for the future. Our dedicated Large Farm Underwriting team specializes in working with large operations and can help you cover their unique needs.