Wednesday June 7 Ag News - World Pork Expo edition

Nebraska Cattlemen and Merck Animal Health Partner to Launch Cartridges for Cash Program

Today, Nebraska Cattlemen and Merck Animal Health announced they are partnering to launch the Cartridges for Cash program. The program will invest in the next generation of Nebraska’s beef cattle industry leaders by providing financial support for Nebraska Cattlemen’s Young Cattlemen’s Connections (YCC) program and to the Nebraska Cattlemen’s Foundation to fund two scholarships.

Producers are encouraged to save their empty Revalor (trenbolone acetate and estradiol) implant and Ralgro (zeranol) implant cartridges and turn them into their local Merck Animal Health representative or to Nebraska Cattlemen. Merck Animal Health will donate $0.25 for every Revalor (-G, -S, -H, -IS, -IH, -200, -XS, -XH) and Ralgro cartridge Nebraska Cattlemen. The more cartridges, the larger the donation, up to a maximum of $10,000 annually.

“Merck Animal Health is proud to be part of the cattle industry and is unconditionally committed to the development of its future leaders,” said Justin Jarecke, regional manager for Merck Animal Health. “The Cartridges for Cash program is a meaningful way for us to team up with our customers to strengthen Nebraska Cattlemen’s support of young beef producers for scholarships and other educational programs.”

Nebraska Cattlemen President Steve Hanson said, “We grateful for our ongoing partnership with Merck Animal Health and appreciate their willingness to bolster the next generation of beef cattle producers. Education is the key to ensuring future leaders of our industry can improve Nebraska’s world-class beef production. Nebraska Cattlemen looks forward to joining forces with the cattle community to collect cartridges and provide important educational opportunities.”

For more information about Cartridges for Cash in Nebraska, visit nebraskacattlemen.org.



Nebraska Rancher Craig Haythorn to be Honored with National Golden Spur Award

Renowned rancher and horseman, Craig Haythorn, will be honored with the National Golden Spur Award at the Buddy Holly Hall of Performing Arts & Sciences in Lubbock. This prestigious award recognizes his outstanding achievements in the ranching and livestock industries.

Craig Haythorn is the proud owner and operator of Haythorn Land and Cattle Co. located in the sandhills of Arthur, Nebraska. He represents the fourth generation of the Haythorn family, with their ranching legacy spanning back to his great-grandfather's immigration from England. The Haythorn operation, covering 100 square miles in the Sandhills region, has become an iconic symbol of American ranching excellence.

Throughout his life, Craig has exemplified his deep connection to the land and animals. From a young age, he actively participated in cattle drives and assumed responsibilities on the ranch. Today, at 76 years old, Craig leads the generations that follow him, preserving the traditions and values of the Haythorn Land and Cattle Co.

The Haythorn name is inseparable from their exceptional horses, which have played a crucial role in the ranch's success. The horses bearing the Haythorn Figure Four brand have been trusted companions in countless rodeos across the nation. Craig's unwavering commitment to Western traditions and cowboy values has earned him recognition such as the 2008 Western Horseman Award and the 2019 Foy Proctor Memorial Cowman's Award of Honor.

The National Golden Spur Award is a prestigious accolade jointly presented by leading ranching and livestock organizations. It serves as a testament to Craig's extraordinary accomplishments and his enduring impact on the industry.

Tickets for the National Golden Spur Award Honors will be available to the public starting July 28. For more information and reservations, please visit goldenspurhonors.com.



Husker Harvest Days Creates Economic Ripple Effect in Rural Community

Husker Harvest Days brings nearly $9 million in total economic impact to rural Nebraska.

“Agriculture is Grand Island’s business,” says Cindy Johnson, president of the Grand Island Chamber of Commerce. “Our companies, our livelihoods depend on a strong ag market. When agriculture struggles, so does our community. For decades, we’ve seen the value Husker Harvest Days injects into our community.”

The three-day event is the world’s largest totally irrigated working farm show, featuring the latest equipment, supplies and technologies available to today’s farmers and ranchers. But Johnson says visitors to her city stay a while, many spending the week.

“They are filling our hotels, eating in our restaurants, visiting our downtown businesses,” she explains. “Husker Harvest Days impact is felt all across our community.”

Here’s how:
    500 exhibitors
    100,000 attendees
    >$100 average hotel night spend
    >$60 daily spend on food and transportation

Matt Jungmann, the national events director at Farm Progress is also a farmer in York, Ill., population 276. “I see firsthand the struggle to keep rural communities alive and thriving,” he says. “I’m so proud that Husker Harvest Days can add to the economy of the Grand Island region.”

In 2018, Farm Progress, the city of Grand Island, Hall County and Chief Industries showed their commitment to this rural area nearly two hours west of Lincoln by investing $7.5 million to upgrade the site. Improvements included concrete, electrical and lighting--Husker Harvest Days was here to stay.

Chief Industries is also a stalwart of Grand Island. Here they manufacture grain bins, metal buildings and even residential dwellings. Beth Frerichs, Chief Industries director of marketing and communications, says her employees live and raise families in this community and reap the economic benefits from the show.

“Husker Harvest Days really has a positive impact on our school systems,” Frerichs says. “Students and volunteers operate the food stands at the show. Those profits are invested right back into their own educational or extracurricular programs. It is a great economic boost for these rural schools, one they count on annually.”

Jungmann realizes the importance of the show both now and in the future. “Husker Harvest Days is here for the long-haul, providing the latest technology and information to keep farm families thriving from one generation to the next,” he adds. “But we are equally committed to investing in rural communities to make them resilient for years to come.”

The 2023 Husker Harvest Days will be held in Grand Island, Neb., Sept. 12-14. For more information, check out HuskerHarvestDays.com.  



United Farmers’ Cooperative Members Approve Merger with NEW Cooperative, Inc.

We are pleased to report that the members of United Farmers’ Cooperative, headquartered in Red Oak, Iowa, have approved the merger proposal with NEW Cooperative, Inc. The merger will become effective September 1, 2023.

UFC’s membership vote met Iowa’s state voting requirement for a successful cooperative merger. To approve the merger, Iowa law requires at least 50 percent (plus one) of UFC’s Class A membership to vote, with at least two-thirds of those casting ballots voting in favor of the merger. The ballot counting committee consisted of UFC’s nominating committee, and two representatives of the auditing firm, Meriwether Wilson & Co PLLC.

We look forward to welcoming the members and employees of UFC to NEW Cooperative and wish to thank the UFC membership for their support and confidence placed in NEW Cooperative by voting in favor of this merger. NEW also thanks the staffs of UFC and NEW for all of the work done during the merger study process. NEW Cooperative looks forward to leveraging the value of our two combined memberships and employee teams.

NEW’s Board of Directors will expand to a total of 15, with the addition of two directors and one associate board member to be appointed by the UFC Board.



U.S. Department of Agriculture Announces Key Staff Appointments

The U.S. Department of Agriculture (USDA) today announced the names of individuals who will hold senior staff positions in Washington, D.C.  Cindy Axne has been appointed Senior Advisor for Rural Engagement, Delivery and Prosperity

Before joining USDA, Axne served as the U.S. House Representative for Iowa’s 3rd Congressional District from 2019 to 2023. She served on the House Committees on Agriculture and Financial Services and Co-Chaired the Congressional Rural Caucus. During her time in Congress, Axne supported legislation that helped Iowa’s local producers and farmers and joined the Rural Broadband Task Force to ensure Iowans could access high-speed internet. Her legislation, the Sergeant Ketchum Rural Veterans Mental Health Act, was signed into law in 2021, expanding access to care for rural veterans.

Before being elected to the U.S. House of Representatives, she served as Principal at Axne Consulting Group. Prior, Axne held multiple senior-level positions for the State of Iowa in the Department of Natural Resources, Department of Management, and Department of Administrative Services. She earned a Bachelor of Arts in Journalism from the University of Iowa and a Master of Business Administration from Northwestern University – Kellogg School of Management.



NPPC Speaks Up on Policy Priorities at World Pork Expo
 
The National Pork Producers Council (NPPC) hosted a policy panel today at the 2023 World Pork Expo. NPPC board officers and experts discussed the pork industry’s current priorities vital to protecting producers’ livelihoods and ensuring pork production remains a pillar of the U.S. economy.
 
“Advocating for reasonable public policy, expanding exports, protecting our animals from foreign animal diseases and defending efforts to restrict what we do all help keep our farms successful,” said NPPC President and fifth-generation pig farmer Scott Hays of Missouri. “Despite facing economic headwinds, pig farmers have always prevailed in difficult times to put safe and affordable food on the table.”
 
Preparing for and preventing foreign animal diseases, addressing the agricultural labor shortage, and increasing pork exports are some of the top public-policy issues for pork producers.
 
Protecting the safety of the food supply in the farm bill
Andrew Bailey, NPPC legal counsel, science and technology, discussed how the renewal of key farm bill programs addressing animal disease prevention and management of foreign animal disease (FAD) risks are vital to protecting the U.S. pig herd, which include:
    National Animal Vaccine and Veterinary Countermeasures Bank
    National Animal Health Laboratory Network
    National Animal Disease Preparedness and Response Program
    National Veterinary Stockpile

Dr. Anna Forseth, NPPC director of animal health, shared the industry’s progress on six priorities to prepare for a FAD. These include – harmonizing state and federal response, on-farm preparedness, surveillance, U.S. SHIP indemnity and international trade.
 
“Pork producers are facing an increasing threat from foreign animal disease, such as African swine fever, and the potential impacts cannot be overstated,” said Hays. “Farm bill programs and funding support critical prevention and preparedness measures to protect producers and consumers by minimizing risks to the U.S. pork supply.”
 
An active trade agenda supports producers and the U.S. economy
 U.S. pig farmers have built a reputation for providing high-quality, affordable, and safe pork products globally. Maria C. Zieba, NPPC vice president of international affairs, highlighted the importance of international markets for the industry. Opening new and expanding existing markets through trade agreements, investment framework agreements and market access deals is vital to its success.
 
NPPC is focused on bilateral market access negotiations in Southeast Asia, and its inclusion in the Indo-Pacific Economic Framework, which encompasses 13 countries and 1.5 billion consumers and through the U.S.-Taiwan Initiative on 21st-Century Trade.
 
Visa reform needs to address the labor shortage
 Christina Banoub spoke about the ongoing labor shortage negatively impacting all links of the food supply chain, particularly in the pork industry. NPPC supports expanding the H-2A visa program that will allow access to year-round labor for agriculture, including pig farming.
 
Despite higher wage offerings and competitive benefits, pig farm employment has declined since 2021. As a result, the U.S. pork industry is dependent on foreign-born workers, but current visa programs fail to meet the workforce needs of farmers. We are in dire need of expansion of the H-2A visa program.
 
NPPC CEO Bryan Humphreys commented that recent policy successes and disappointments will impact producers for years to come. With the Supreme Court’s decision upholding California Proposition 12, another NPPC priority is working with the California Department of Food and Agriculture to ensure a smooth transition for farmers and consumers who want to continue buying pork at California grocery stores and restaurants.
 
“As our industry faces challenging economic conditions, producers need certainty and peace of mind in other areas of their businesses.,” said Humphreys. “As the global voice for the U.S. pork industry, NPPC speaks up to shape policy that will allow producers to focus on what they do best — provide consumers with the safest and the most wholesome and nutritious pork products found anywhere on the planet."
 
Policy papers and additional resources are available at www.nppc.org/wpxmedia for more detailed information.



NATIONAL PORK BOARD NAMES NEW SENIOR VP FOR MARKET GROWTH

The National Pork Board (NPB) announced today that Dr. David Newman will assume the role of senior vice president for market growth effective June 19, 2023. In this role, Newman will lead the team of 16 professionals tasked with growing market demand internationally and domestically, as well as the organization’s health and nutrition research and outreach.

Newman is no stranger to the Pork Board and its work in these areas. He began his first of two three-year terms on the National Pork Board in 2016 and served two years as the board’s president in 2020 and 2021. He has been an active participant in numerous committees and task forces, ranging in focus from strategic planning, swine health, producer services, and domestic marketing. He has played an active role in helping expand international markets for U.S. pork. In addition to participating in several producer delegations to major markets, including Mexico, Japan, and China, he has served as an executive committee member of the U.S. Meat Export Federation since 2021.

“David is a tireless advocate for the pork industry, and understands every major facet of pork marketing,” said Bill Even, National Pork Board CEO. “There aren’t many people in the world who have his experience in international trade, domestic demand, meat science and research. We’re thrilled to have him lead the team that is delivering growth for the pork category and adding value for America’s pig farmers.”

Newman joins the Pork Board following a successful career as a full professor at Arkansas State University, where he led the meat science program and the university’s swine research facility. He is also owner and president of both Newman Farm Heritage Berkshire Pork and Quality Meat Solutions, a firm that conducts research on meatcase metrics and quality and provides animal welfare audits for farms and processing plants.

He holds a Ph.D. in Meat Science and Animal Science from North Dakota State University and a Bachelor of Science in Animal Science from the University of Missouri, with a minor in international agriculture.  

“I’m grateful for the opportunity to lead this work for the Pork Board,” said Newman. “When I started my first term on the board in 2016, I raised my hand to get involved in the work that I felt we needed to tackle the hardest – driving demand at home and across the globe. We’ve made some great progress since then, but there’s still much work to be done. There’s a great team working on behalf of producers to grow markets for pork, and I’m honored to be a part of that.”



Fertilizer Prices Mainly Lower; Anhydrous Fertilizer Drops 15%

After one week of mostly higher levels, retail fertilizer prices are again mostly lower, according to retail fertilizer prices tracked by DTN for the last week of May 2023. Six of the eight major fertilizers are lower in price compared to last month. Only two fertilizers were substantially less expensive. DTN designates a significant move as anything 5% or more.

Anhydrous was 15% lower compared to the prior month and the nitrogen fertilizer had an average price was $791/ton. Urea was 6% lower looking back to last month with an average price of $622/ton.  Four other fertilizers were slightly lower compared to last month. DAP had an average price of $824/ton, potash $620/ton, 10-34-0 $739/ton, and UAN28 $413/ton.

Two fertilizers were slightly more expensive compared to a month ago. MAP had an average price of $832/ton and urea $622/ton.

On a price per pound of nitrogen basis, the average urea price was $0.68/lb.N, anhydrous $0.48/lb.N, UAN28 $0.74/lb.N and UAN32 $0.75/lb.N.

All fertilizers are now lower by double digits compared to one year ago. 10-34-0 is 18% less expensive, DAP is 22% lower, MAP is 23% less expensive, potash is 30%, both UAN28 and UAN32 are 35% lower, urea is 37% less expensive and anhydrous is 48% lower compared to a year prior.



Weekly Ethanol Production for 6/2/2023

According to EIA data analyzed by the Renewable Fuels Association for the week ending June 2, ethanol production increased 3.2% to 1.036 million b/d, equivalent to 43.51 million gallons daily, the highest level since early December. Output was 0.3% less than the same week last year but 1.7% above the five-year average for the week. The four-week average ethanol production rate rose 1.7% to 1.002 million b/d, equivalent to an annualized rate of 15.36 billion gallons (bg).

Ethanol stocks expanded 2.8% to 22.9 million barrels, the second straight increase after five weeks of declines. Stocks were 2.9% less than a year ago yet 4.9% above the five-year average. Inventories built across all regions except the East Coast (PADD 1) and Rocky Mountains (PADD 4).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, rose 1.3% to 9.22 million b/d (139.47 bg annualized). Demand was 0.2% more than a year ago and 1.7% above the five-year average.

Refiner/blender net inputs of ethanol slid 4.2% to 887,000 b/d, equivalent to 13.60 bg annualized. Net inputs were 1.2% less than the same week last year and 0.7% below the five-year average.

Ethanol exports were estimated at 97,000 b/d (28.5 million gallons for the week), a sizable increase from the prior week. There were zero imports recorded for the 26th consecutive week.



U.S. Exports of Ethanol and DDGS Curbed in April
Ann Lewis, Senior Analyst, Renewable Fuels Assoc.

April U.S. ethanol exports slipped 5% to 125.7 million gallons (mg), despite a 95% increase in undenatured ethanol shipments. Canada was our largest destination for the 25th consecutive month with 46.9 mg crossing the border (17% lower than March), including two-thirds of all April U.S. denatured exports. Other major global customers included the European Union (16.5 mg, +26%)—primarily shipped to the Netherlands—India (13.2 mg, -42%), South Korea (10.8 mg, +108%), the United Kingdom (10.4 mg, +20%), and Mexico (7.0 mg, +19%). Brazil again remained absent from the market with a 16% tariff on U.S. ethanol in place. Year-to-date U.S. ethanol exports total 479.8 mg, lagging 17% behind last year at this time and marking the smallest January-April exports in seven years.

For the fourth consecutive month, the U.S. did not log any meaningful imports of foreign ethanol (Brazil shipped 120,345 gallons of undenatured fuel ethanol).

April U.S. exports of dried distillers grains (DDGS), the animal feed co-product generated by dry-mill ethanol plants, declined 13% to 777,617 metric tons (mt). Mexico remained our top customer for the tenth consecutive month despite a 25% cut from March volumes, with imports totaling 157,339 mt. Mexico, South Korea (111,573, -13%), Indonesia (73,341 mt, +7%), and Vietnam (65,258 mt, +23%) together captured roughly half of our global market in April. Japan (41,984 mt, +14%), the European Union (41,832 mt, +45%)—with the entirety bound for Ireland—Colombia (39,495 mt, a tick lower), Thailand (39,365 mt, +179%), Canada (36,008 mt, -26%), and Ecuador (30,847 mt, +44% to a record high) imported sizeable volumes as well. Year-to-date DDGS exports total 3.21 million mt, coming in 13% below last year at this time and representing the smallest January-April exports in a decade.



University of California Research Shows Emissions-Reducing Benefits of E15 Blend

A newly released, peer-reviewed study from the University of California, Riverside, shows that the E15 ethanol blend provides notable emissions reductions compared to California’s regular reformulated gasoline. The Renewable Fuels Association hailed the report as proof of the value of E15 for The Golden State, which has yet to allow the E15 blend to be used.

“This new study shows what we’ve been arguing all along—that E15 offers emissions benefits that would help meet environmental goals in California, where the state’s 27 million drivers log more than 340 billion miles a year on the road,” RFA President and CEO Geoff Cooper said. “We continue to call on California’s regulators to move quickly to permit E15 to be sold in the state, a blend that also offers cost savings in a place where gasoline prices are higher than anywhere else in the country.” California is one of only two states that has not yet approved E15; Montana is the other.

According to the study, emissions of total hydrocarbons, non-methane hydrocarbons, and carbon monoxide all showed either marginally or statistically significant reductions for E15 compared to regular California gasoline. In addition, particulate matter (PM) and solid particle number emissions dropped substantially with E15, and E15 showed lifecycle greenhouse gas emissions savings when compared to E10. Nitrogen oxide (NOx) emissions when using E15 showed marginal reductions in many cases, but the changes in NOx were not statistically significant.

The research will appear in the October 2023 journal Fuel, and was supported by RFA, the California Air Resources Board and other organizations. Researchers noted that this is the largest U.S. study to date that focuses on the effects of ethanol fuels on tailpipe emissions from current technology vehicles.

Related LCFS Workshop Comments Submitted
Approval of E15 by the state also could help facilitate greater near-term carbon emissions reductions under California’s Low Carbon Fuel Standard, according to comments and analysis filed Tuesday by RFA in response to a workshop held late last month by California’s Air Resources Board.

In the comments, RFA Chief Economist Scott Richman suggested CARB “stepdown” its compliance curve with more stringent greenhouse gas reduction targets. RFA is working with a broad coalition of low-carbon fuel providers on a report to demonstrate the clean fuels industry’s capabilities to deliver more significant carbon intensity reductions.

“If E15 had been used in California in 2022 rather than E10, that alone would have allowed the LCFS compliance target to be nearly 2 percent lower. Migration of the market to E15 over the course of this decade would enable a 2.5 percent reduction of the current 2030 target against the 2010 baseline.”

Analysis accompanying the comment letter showed that using E15 instead of E10 in 2022 would have further reduced GHG emissions by 2.5 million metric tons and cut petroleum consumption by 500 million gallons. Because CARB has not yet approved E15, those additional GHG reductions are being left on the table.



NMPF Board of Directors Names Gregg Doud New President and CEO

The National Milk Producers Federation’s Board of Directors today unanimously voted to name Gregg Doud, a globally recognized agricultural leader, as its next president and CEO, succeeding Jim Mulhern, who is retiring at the end of the year.

“Dairy farmers across the nation are pleased to endorse a true champion of agriculture, someone who both understands the hard work we do and the opportunities and challenges we face both here and abroad,” said Randy Mooney, chairman of the NMPF Board. “NMPF has long been blessed with leadership that’s been able to take its advocacy for dairy to a higher level. We strongly believe that Gregg Doud more than amply provides the expertise, the background, and the passion we will need as we navigate a challenging, but promising, new era.”

Doud has served in numerous leadership roles in trade association and government work in his more than 30-year career in agricultural policy and economics, most recently at Aimpoint Research, a global intelligence firm specializing in agriculture and food. From 2018 to 2021 he served as Chief Agricultural Negotiator for the U.S. Office of the Trade Representative, appointed by President Donald Trump and confirmed by the Senate, where he led numerous successful efforts to create a fair, prosperous environment for U.S. agricultural exports, including the U.S.-China “Phase One” agreement and the USMCA negotiations.

Before that role, he served as president of the Commodity Markets Council, a trade association for commodities exchanges and industry counterparts; as senior professional staff on the Senate Agriculture Committee; and as chief economist for the National Cattlemen’s Beef Association, among other roles.

Doud said that as the organization’s next leader, he’s excited to engage on critical issues facing dairy farmers. “From the policy arena to new technologies, there are many great new opportunities for dairy producers at home and internationally,” he said. “It is a tremendous privilege to have the opportunity in these exciting times to lead NMPF, one of Washington’s oldest, most prestigious and well-respected agricultural trade associations.”

Doud was born and raised on a 1,000-acre grain, hog and cattle farm near Mankato, KS. He is a graduate of Kansas State University, where he earned a bachelor’s degree in animal science and a master’s in agricultural economics. He remains actively engaged in production agriculture through partnership in a cow-calf operation and lives with his wife and two children on their horse farm in Lothian, MD.

Doud will begin official work at NMPF in September as its chief operating officer before assuming the role of president and CEO upon Mulhern’s retirement.



Grain and Farm Supply Cooperatives Have Options for Managing Skyrocketing Insurance Costs

Grain and farm supply cooperatives are facing sharply higher property insurance premiums due to the increasing frequency and severity of weather-related disasters. U.S. property and casualty insurers have responded to the increase in natural catastrophe claims by raising prices, increasing deductibles and tightening coverage terms and conditions. For agribusinesses, insurance expense growth has outpaced total operating expense growth by a wide margin since 2021.

According to a new report from CoBank’s Knowledge Exchange, commercial property insurance rates will remain elevated for the next 12-18 months, as insurers attempt to make up for recent year losses and pursue rate adequacy in an environment of higher costs. The CoBank report outlines strategies grain and farm supply cooperatives can evaluate to mitigate higher costs for insuring grain elevators, input storage buildings and other facilities.

“Over the past three years, cooperatives and their property-casualty insurers have faced a perfect storm of excessive property losses due to floods, tornados and a host of severe weather events,” said Kenneth Scott Zuckerberg, lead farm supply and biofuels economist for CoBank. “And those losses have come during an inflationary period when the costs for labor and building materials needed to repair physical structures were much higher.”

In 2022, the cost of U.S. weather and climate disasters totaled $170 billion. That’s up from $155 billion in 2021 and $114 billion in 2020. The magnitude of three consecutive years of above-average losses has driven one Omaha-based underwriter of property insurance for grain and farm supply cooperatives to exit the market. Other agribusiness insurers have restricted coverage.

Zuckerberg estimates that U.S. agribusinesses paid 40% to 60% more in risk-adjusted premiums so far this year. And cooperatives that experienced property losses between 2020 to 2022 saw rates increase by as much 100%, along with higher deductibles and lower total coverage limits.

“While there’s no silver bullet solution, there are steps cooperatives can take to manage their premiums,” said Zuckerberg. “Improving internal loss control and purchasing property coverage through a hybrid insurance program are among the options co-ops can evaluate in consultation with their accounting, legal and risk management advisors.”

Cooperatives may be able to reduce property insurance costs by deploying newer analytic software programs that enhance internal risk management and improve loss control. These programs give cooperatives more ability to document improved risk management and negotiate coverage that closely aligns with their exposure, rather than the broader industry at large.

Participating in a hybrid insurance program created and managed by a specialty carrier or broker is another option available to cooperatives. Hybrid programs blend the benefits of traditional and non-traditional insurance. The non-traditional component of these programs gives cooperatives the opportunity to exercise greater control over their own risk management practices and the ability to self-insure more risk. The traditional component provides the security of using an established insurance company that has consistent reinsurance support and less capital intensity.