WeatherBill, a high profile technology focused provider of weather risk solutions and weather insurance for industries such as farming, has published a report looking at the impact of recent heavy rains across the U.S. Eastern Corn Belt and how that weather is likely to affect growers financially due to planting delays.
The report shows that between 834 million and 1.6 billion bushels of corn are at risk across top corn producing states as a result of planting delays due to the extreme weather. They estimate that it could equate to a financial loss of between $5.8 billion and $11.2 billion depending on how quickly growers can get their crops planted as the fields recover and precipitation dries up.
That could be a devastating loss for many growers, particularly those without sufficient weather risk protection or weather insurance. There could also be a knock-on effect to reinsurers who underwrite agricultural insurer schemes. Alternative methods of weather risk management would provide at least some financial assurance to farmers under weather conditions like these with weather derivatives, weather-index insurance and traditional weather insurance cover all possible solutions. Reports like this serve to show the importance of weather hedging as part of an overall risk management strategy.