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Managing farm to fork risks: Dishing up Thanksgiving Day dinner

Getting Turkeys to the Table on Thanksgiving

Thanksgiving Day is a particularly American holiday, traced back to 1621, when the Plymouth colonists celebrated their first successful harvest in the New World. The harvest festival lasted three-days.  Attending were 53 Plymouth colonists and 90 Wampanoag Indians. There is no exact menu for the 1621 feast, but it is known that four colonists were sent out to hunt birds for the feast. They killed enough fowl to serve the group for almost a week. The Wampanoag Indians contributed five deer. In addition to fowls, wild turkey, corn and pumpkins (not pies), the colonists served lobster, seal, and swans. Because they didn’t have ovens and the Mayflower’s sugar supply had dwindled by the fall of 1621, the meal did not include pies, cakes or other desserts.

It wouldn’t be until 1863, in the midst of the Civil War, that Thanksgiving Day would be proclaimed a national holiday by President Abraham Lincoln.

Today’s classic Thanksgiving menu includes turkey, stuffing, mashed potatoes, sweet potatoes and marshmallows, green bean casseroles, cranberries, pumpkin pie and assorted root vegetables. Over 88% of Americans will eat turkey – roasted, baked or deep-fried. Almost 48 million turkeys are expected to be consumed and an estimated 40 million green bean casseroles will be served, made with about 80 million pounds of green beans.  Annually, Americans eat approximately 750 million pounds of cranberries and 2.4 billion of sweet potatoes, most of which will be consumed on Thanksgiving Day. The most common dessert is pumpkin pie. It is estimated that about 50 million pies made from about 25 million pounds of pumpkin will be consumed.

Turkey Logistics

The Thanksgiving turkey supply chain can be complicated.  Supermarkets and grocery stores have to plan up to 6 months in advance to make sure they have all the birds they need in stock come turkey time. This means establishing contracts, transportation, and deliveries from both large scale turkey producers and local turkey farms. 

Turkeys may be native to the traditional Thanksgiving dinner, but that does not mean that all the Thanksgiving turkeys are native to the US.  According to the US Department of Agriculture, the US imported approximately USD $24 million worth of turkeys from Canada last year. In the US, Minnesota has the distinction as the state raising the most turkeys – approximately 40.million, followed by North Carolina, Arkansas, Indiana, Missouri and Virginia. 

Turkeys are a valuable commodity and while farmers may protect their high-value flocks from fire and other natural perils via their property insurance coverage many also purchase specialized livestock insurance coverage

According to Eric Conklin, livestock underwriter at XL Catlin, “Livestock coverage protects the value of their flocks from other perils such as a power outage or ventilation malfunction that could cause suffocation or heat stress among the flock and result in death.”

“Getting the live birds to the packing plant safely is certainly an important part of the process,” says Mr. Conklin.  “And we are able to extend our coverage to more than just the birds.  Many of our clients also transport refrigerated/frozen meats.  We even have one client who specifically ships turkey eggs to hatcheries, so we can be involved in every step of the process.” 

Even more specialized livestock coverage options such as coverage for avian influenza, says Mr. Conklin, are only available through XL Catlin’s London Livestock team. 

Once the turkeys get to grocers, they typically arrive in two varieties.  Frozen turkey is the most common accounting for approximately 90% of Thanksgiving sales. Fresh turkeys make up the remaining 10% of turkeys. These turkeys take more planning on the part of producers and retailers.

Poultry, Pies and Produce-in-Transit

The average weight of each turkey consumed on Thanksgiving Day is about 15 pounds. At an average of 50,000 pounds hauled per truck, it will require 14,400 big rigs to deliver those turkeys in time for dinner. To get the sides dishes – sweet potatoes, green beans, and cranberry sauce to the table - will require more than 65,050 big rigs.  As for the canned pumpkin, it will take about 500 big rigs to deliver the necessary cans of pumpkin pie mix.

Protecting those rigs, as well as their edible cargo, is vital to ensuring that the turkeys and side dishes arrive in time for Thanksgiving Day.

According to XL Catlin’s Senior Vice President and Chief Underwriting Officer of Inland Marine, Anne Marie Elder, “The holiday season is prime time for truck hijackings. Believe it or not, food and drink are among the most popular hijacked items. Everyone needs food.  Stolen food is easy to move and therefore, a tempting target for thieves.”   

In fact, food and drink has been the most stolen type of freight since 2008, according to a report by logistics security services provider Freight Watch International.  According to the report, as high-value shipments are more well-protected, organized cargo criminals are targeting a wider variety of low-risk, high-reward shipments, such as food and drink.

 

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...we provide comprehensive motor truck cargo insurance that keeps our clients’ cargo safe from everything from theft and, when endorsed, mechanical breakdown and resultant temperature change."

 

According to Ms. Elder, “We also urge our clients to keep a watchful eye on scammers that can’t wait to steal cargo on the road.  For instance, there’s a growing threat of bogus trucking firms using fake paperwork to hijack truckloads of food and beverage from storage facilities.”  

“That’s why we provide comprehensive  motor truck cargo insurance that keeps our clients’ cargo safe from everything from theft and, when endorsed, mechanical breakdown and resultant temperature change.   And, for clients that must store their goods, even temporarily, there’s warehouse legal liability insurance to cover such losses,” Alexander McGinley, Vice President and Underwriting Manager for Inland Marine, explains. “Our products’ coverage territory automatically includes both the US and Canada.  If imports from other countries are involved, we can provide ocean cargo insurance.”

Braced for a breakdown

As frozen turkeys are the product of choice for most Thanksgiving cooks, keeping them frozen is a high priority for those involved in the Thanksgiving supply chain. 

Brian Strain, XL Catlin’s head of  Equipment Breakdown insurance adds, “Turkeys are highly susceptible to infections. Whether the turkeys are live or frozen - it’s important to make sure that the storage facilities are ventilated, that the humidity is kept at an appropriate level, and that the refrigeration is stable. If the refrigeration or ventilation fails, there’s no turkey for dinner.”

In addition, all those side dishes are vulnerable.

“Consider cranberries. They need to be picked, shipped to a processing plant where they are cooked and then placed in those cans,” says Mr. Strain. “If the canning machine breaks down, the cranberry sauce might not reach the table in that distinctive shape we are used to for cranberry sauce.”

“Many businesses rely on equipment breakdown insurance to make sure that if their   operation’s equipment  and machinery breakdown, they have the wherewithal, especially the finances to get it up and running again without production and the bottom line taking too much of a hit,”  explains Mr. Strain.  “Recently, we’ve even gone a step further and have begun offering clients equipment reliability reports which helps them assess the reliability of their equipment so they can be confident that they are able prepare their contribution to Thanksgiving dinner without suffer a breakdown.”

Having a safe, contamination-free holiday

Once the turkey makes it into the grocery store, one might think that’s the end of the line in tracking suppliers’ risks.  But let’s not forget about the potential of product contamination and the costs of a recall that might result.

There have been numerous incidents of late with food recalls as a result of contamination, undeclared allergens and other issues. In 2011, one major poultry processor undertook a Class 1 recall of over 36 million pounds of turkey due to a risk of elevated levels of Salmonella Heidelberg which led to 136 people officially sickened by the multi-state outbreak according to Centers for Disease Control. More recently, the USDA’s Food Safety and Inspection Service (FSIS) recently oversaw a Class I recall of more than 25,000 pounds of turkey products that were reconditioned without an FSIS inspection. 

“Contamination can occur in a lot of different ways and from the farm to the processing plant and right through the distribution chain,” notes John Turner, XL Catlin’s Vice President and Head of Product Recall, USA & Canada.  

“Pumpkins, like many of the other side dishes on the Thanksgiving menu, are grown in or on the dirt. That means they are susceptible to pathogen contamination such as e-coli and salmonella from livestock or wild animals passing through the fields or contaminating ground water; also there is a risk of contamination at the processing plant,” says Mr. Turner.  

Contamination or mislabeling can also occur during processing as well.  Last year, one grocery voluntarily recalled vegan pumpkin pies produced and sold in its Southwest region because they contained undeclared walnuts which would pose a risk to those who have nut allergies or severe sensitivities.

“Most companies know it is in their best interest to voluntarily recall a product because they will have a difficult time restoring consumer and regulator confidence if they are forced to recall their products by FDA or the USDA’s FSIS,” explains Mr. Turner.  “And more and more are relying on product contamination insurance to help not only address the possible costs of recall but also to enlist the advance planning and risk consulting that insurers like XL Catlin offers to help avoid contamination incidents and recalls altogether.”

Clearly, Thanksgiving prep for many starts months before this year’s turkey is stuffed and in the oven.  A lot of work, planning and wise risk management goes into dishing up the typical 4,500 calorie dinner, all contributing to make for a safe and happy Thanksgiving.

Sources:

Thanksgiving History, history.com

The National Turkey Federation

Five Ways Truckers Make Thanksgiving Possible

Truckers Make Thanksgiving Possible, Open Road Drivers Plan, November 2013

The information contained herein is intended for informational purposes only. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details.

XL Catlin is the global brand used by XL Group Ltd’s insurance subsidiaries. In the US, the insurance companies of XL Group  Ltd are: Catlin Indemnity Company, Catlin Insurance Company, Inc., Catlin Specialty Insurance Company, Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Insurance Company of New York, Inc., and XL Specialty Insurance Company. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions.

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