Lycetts, the UK's premier countryside insurance broker, has today urged farmers to review their insurance policies in light of dramatic increases in agricultural commodity prices.

With billions of pounds worth of crops in store on UK farms awaiting distribution over the next 12 months, Lycetts' experts are increasingly finding that farmers do not have sufficient cover following the recent market rises. With the value of crops such as wheat and barley doubling in the past year, the concern is that farmers might be left out of pocket should a major peril such as fire occur before the crops are removed from the farm.

Rupert Wailes - Fairbairn, of Lycetts rural division, explains: "In contrast to the relatively stable stock markets of late, the markets for soft commodities such as wheat, barley, oil seed rape, peas and beans, have become very volatile, especially over the last four months. Latterly these markets have been undervalued and following mixed harvests world-wide in countries such as Australia, global stocks are at a 30 year low."

Other key reasons for the current shortage are:

• Low intervention stocks in the EU has left the EU with little ability to control markets and therefore prices;
• Increasing consumer demand globally, especially from India and China;
• A significant shift away from wheat to maize production with an increasing emphasis on bio-fuel crops in the US;

and

• Export licenses have been put on hold in the Ukraine.

Rupert adds: "Whilst these price rises are good news for growers, farmers should re-evaluate the sums insured of their crops to avoid potential under insurance should they need to make a claim - this could equate to 50% of current crop values. This is a big risk to take and a lot of money for any business to potentially lose.

"It is not just crops in store which need to be taken into account, but also those crops which are in the ground for next year.

"As a direct consequence of increasing extremes in weather patterns, we are finding that the number of fire and storm damage claims are rising. At a time when crop prices are at an all time high, it is crucial that farmers take the time to speak to their broker at regular intervals and adjust their cover accordingly to track commodity markets."