High rainfall across the eastern states of Australia has impacted the supply and demand for hay. As a result, the price of hay in some regions is rising, potentially putting agribusinesses at risk of underinsurance at a time when haystack fire risk has also increased.

Danielle Whitelock, General Manager – Client Experience with specialist agricultural insurer Achmea Australia, said market fluctuations can change the value of assets quite considerably.

“We encourage agribusinesses to take a close look at their insurance cover so that the sums insured they have selected for hay reflect those market increases. If it does not adequately reflect the true value, agribusinesses may find themselves underinsured and financially exposed if a major event happens, like a haystack fire,” Danielle said.

As reported by the Australian Fodder Industry Association, areas such as Gippsland in Victoria, as well as the Bega Valley and North Coast of NSW, saw Lucerne hay selling for over $500 per tonne at the end of November. In central South Australia, cereal hay reportedly increased by $40 in a single week, with demand for hay expected to increase further in coming months¹.

With the onset of hotter and drier conditions, Achmea Australia also encourages farmers to take precautions against on-farm fires, and review the location and storage of their haystacks.

“Preparing for and actively mitigating the risk of fires is important to keep farming,” Danielle said.

“Fires can cost upwards of hundreds of thousands of dollars in lost property, machinery and other essential farming equipment, not to mention the possibility of causing serious personal injury,” she said. Furthermore, a fire can cause a significant business disruption to agribusinesses and the communities they support,” Danielle said.

“Reducing on-farm risks can help protect yourself, your employees and your business, so it is important to routinely review hazards and take steps to avoid losses before they occur,” she said.

With years of experience helping clients get back on their feet after disaster, Danielle shares several risk mitigation strategies that may help to reduce hazards and limit the damage caused by fire:

  • Harvest-related fires often start because of bearing failure or material build up on the header. Regularly maintain your machines, routinely clear the engine bay of any debris, ensure spark arrestors are maintained and check for hot bearings.
  • Ensure hay has dried properly before baling to avoid the risk of spontaneous combustion. Monitor bales post-baling and when hay is stored, for at least eight weeks after baling.
  • Spread your risk by ensuring sufficient clearance around hay sheds. Limit the number of bales per shed to reduce the risk of losing all your hay in a single event.
  • Postpone work such as harvesting or slashing, and avoid driving through crops during hot, dry weather as hot exhausts and sparks can start fires.
  • Maintain and remove long grass and debris around your house and farm buildings. Firebreaks are critical to help slow down a fire and reduce its intensity.
  • Ensure your pumps, firefighting equipment and vehicles are serviced and in good working order. Check your family and workers know how to use the equipment in an emergency.

“While these steps may help reduce fire risk, hay farmers know it only takes one spark in hot windy conditions to ignite a haystack in just a matter of seconds,” Danielle said.

“The devastation caused by fires can be wide-reaching and potentially cost an agribusiness a lot of time and money. With an increase in the risk of haystack fires combined with the higher value of hay, now is the time for agribusinesses to contact their insurer to check they are adequately covered.”

¹Source: The Australian Fodder Industry Association: Hay Report – 25 November 2022



Insurance issued by Achmea Schadeverzekeringen N.V. (Achmea)
ABN 86 158 237 702 AFSL 433984.

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