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Livestock Operations Grow as Demand Rises; Nationwide’s Cumings Sees Direct-to-Consumer Models Adding Additional Liability Risk

Specialization is critical in the cattle business and increased consumer demand for protein is driving new trends, including niche farms that offer direct-to-consumer strategies.

In today’s evolving and growing livestock landscape, deep knowledge of market conditions and specialization is key to success, according to Erin Cumings, a senior consultant with Nationwide’s sponsor relation team who has years of agribusiness underwriting expertise. But for those agents willing to develop that expertise, she sees opportunities for agents in this changing and dynamic market.

According to Allied Market Research, the global livestock insurance market will soon double in value. A recent report reviewed that the worldwide market was valued at $2.79 billion in 2021 but is estimated to reach $5.77 billion by 2031. Those estimates show the market growing at a compound annual growth rate of 7.9% from 2022 to 2031.

“I think it’s all about protein demand,” Cumings said. “And as we see more demand for our products that we produce in the U.S. around protein, that’s more opportunity for hopefully less market volatility and more profitability for farmers.”


The three main livestock policy types are broad peril, livestock mortality and livestock risk insurance. Broad, named peril coverage is generally included in farm and ranch property and casualty policies, while livestock mortality policies are life insurance policies usually purchased for high-value livestock. Risk insurance is administered through the USDA.

Broad peril coverage dominates, according to Cumings. “And as we see the industry evolve, I think that will continue to evolve,” she said.

Cumings said as the number of livestock production contracts increases integrators and producers — and all parts of the agrifood value chain — more liability coverage is needed. Insurers can read these evolving contracts and match insurance coverage to them. [Editor’s note: An integrator is a type of livestock operation where the owner of the livestock (integrator) pays the farmer as a contract grower. The farmer does not own the livestock.]

She noted that rate increases driven by weather related incidents have affected the livestock market in recent years. While availability has largely remained the same, some carriers have reduced capacity for livestock in confined spaces — specifically on risks that have weather exposure.

At the same time, more and more livestock operations are growing, and large operations bring their own amount of risk. Cumings said the industry is also seeing an increase in “niche operations” — specifically those who implement direct-to-consumer strategies. These bring “a lot more general liability exposure,” she said.

Anyone working with these farms needs to understand what safeguards are in place, how risk management fits in and then what insurance products could be added to better protect the farmer, she added.

“That is really important,” she added, “and something that I think not all agents may think about. But to be that expert in the industry, (those are) some things that would really come in handy.”

Weather Woes

The two main challenges cattle producers face are market volatility and weather. Cumings owns a family farm with a spring calving herd, and she has seen firsthand “significant weather changes,” she said, that are forcing reassessments of the operation’s timing and system.

Scientists point to more frequent and disruptive weather events as current-day impacts of climate change. Cumings predicts these events will prompt a shift in geography — and endorsements will be used in places they haven’t been before.

“I think it’s a great opportunity for agents to understand what’s available in the market,” Cumings said, “so as they see these impacts and things impacting their farmers and ranchers, they can offer coverages that maybe they didn’t think about in the past — but would be really useful.”

Livestock risk protection through the USDA covers market volatility. Weather-related livestock loss, however, can be covered by traditional property and casualty products, as can livestock related structures that could be lost during storms or wildfires.

Cumings also noted that confined livestock hold a lot of exposure to risk due to malfunction of ventilation systems. More pressure on the grid or through weather in general could bring more exposure to those systems — increasing importance of coverage.


Agents specializing in the livestock insurance space will stand out in the livestock market as more opportunities for growth emerge.

“Just the diversity and the excitement in the operators, from very niche, small operations that might be doing direct-to-consumer, to large-scale, vertically-integrated operations — it’s a great variety,” Cumings shared. “It’s a great clientele that really relies on an agent for advice and counsel.”

She foresees more specialists — and more agents within agencies who specialize in segments of livestock insurance — entering the mix because they have the power to piece together coverage that may not be offered through general P/C carriers.

“And I think we’ll see a trend in higher-valued livestock, too,” she predicted. “As reproductive technologies advance in livestock, we’re going to have some pretty extremely valuable animals, and the need for very specific, top-notch coverage for those animals is going to be very, very important.”

Cumings emphasized that industry knowledge is necessary to break into the livestock insurance market. Knowing producers and products is key, and now, understanding direct-to-consumer and livestock contract trends is especially valuable.

She recommended agents connect with local trade associations and industry groups. Cumings also encouraged anyone in the insurance industry to look at the Agribusiness and Farm Insurance Specialist designation.

Cumings says that the livestock sector of the agricultural industry is an exciting space, but she understands the risks can be a little overwhelming. Putting together an insurance package and understanding the three separate product offerings can be complicated, she added. Add in today’s challenging weather exposures and rising premium environment can make it even more difficult.