Recent forecasts show the potential of an El Nino event next winter in the western states. The waters of the mid-Pacific are warming up and recent rains in Texas and Oklahoma are historical precursors of a potential El Nino, which brings heavy rains to California and the Southwest. However, no one can predict for certain that an El Nino is imminent and short term forecasts are indicating that the drought conditions and higher than average summer temperatures will persist in the West until late August.
A possible solution to deal with the challenges of a hot, dry summer would be to consider a hedging contract against the weather. eWeatherRisk is a non-insurance contract that enables the purchaser to protect against a specified weather event-such as too much heat, lack of rainfall, or even too much rainfall. The buyer identifies the event and eWeatherRisk creates the contract. If the event occurs, the buyer gets paid, even if they have not suffered economic loss. The contract simply pays if the contracted event occurs. And although the product is ideal for growers, any business can purchase the coverage. If the business is concerned about a weather event that could impact its operations, product availability, or shipping ability, or inability to complete orders due to the weather, the business can get a contract.
Multi-peril crop insurance provides coverage for a wide range of perils to crops, but eWeatherRisk can provide coverage for very specific weather events. If you are interested in finding out more about eWeatherRisk or crop insurance, contact Greg Nelson of Western Growers Insurance Services.