Cattle Price Surge Exposes British Farmers to Underinsurance

Strategic Insights -

British farmers are at risk of being underinsured due to the surge in cattle prices, a rural insurance specialist has warned. Toby Baker, of Lincoln-based insurance broker Dallas Scott Davey, highlighted that livestock prices have increased significantly over the past 12 months, leaving many farmers exposed. As cattle prices continue to strengthen, the gap between market value and insured value is growing, making it essential for farmers to review their policies regularly. Baker emphasized that failing to update a policy could lead to significant financial loss due to the 'average' clause in many policies, which reduces claims if livestock is underinsured.

Key Takeaways:

  • Livestock prices have increased by 36% over the past 12 months, with significant rises recorded across all classes of cattle.
  • The average price of finished cattle has risen from 476p/kg in June 2024 to 650p/kg in May 2025.
  • Store cattle that were once insured at £1600 now sell for £2400, while top-quality fat cattle reach over £3000 at some markets.
  • Many insurance policies are not keeping pace with real-time market changes, leaving farmers underinsured.
  • The 'average' clause in many policies reduces claims if livestock is underinsured, resulting in costly surprises for farmers.
  • Farmers are at risk of significant financial loss if they fail to update their policies to reflect the increasing market value of their livestock.

Statistics:

  • 36% increase in livestock prices over the past 12 months
  • Average price of finished cattle:

+ June 2024: 476p/kg

+ May 2025: 650p/kg

  • Price increase of store cattle:

+ £1600 (insured value) vs. £2400 (market value)

  • Price of top-quality fat cattle at some markets: over £3000

Sources:

  • Toby Baker, rural insurance specialist with Dallas Scott Davey
  • "Livestock prices have increased over the past 12 months, with significant rises recorded across all classes of cattle from dairy herds and suckler cows to store cattle, prime fat stock and calves." (Source: Toby Baker)
  • "As cattle prices continue to strengthen, the gap between market value and insured value is growing." (Source: Toby Baker)
  • "If livestock is underinsured, any claim will be reduced in proportion to the shortfall." (Source: Toby Baker)
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