The Rise of Ag Meteorologists!12 Mar , 2012 | 7
Weather forecasting for the agricultural community is nothing new…but agricultural meteorologists are growing in numbers due to the large demand in hedging for weather risk. In my previous posts, I’ve talked about the different paths of meteorology you can take…from TV, Energy Trade Floor, Wind, Solar, Aviation to Marine meteorology. Today, I’d like to spend some time discussing the importance and rise of Ag Meteorologists!
Agricultural Meteorologists generally work at large/small corporations or small consulting shops, hedge funds, (or for themselves) and provide short, medium, and long term weather forecasts for farmers, food companies, hedge funds, energy companies, and traders…among others. Bottom line, Ag meteorologists are analyzing and forecasting any weather phenomena that poses a risk to their crops.
Ag meteorology is a fascinating business to be in. Weather is a HUGE driver of price that affect most commodities traded on the CME exchange (Chicago Mercantile Exchange). From Oranges to Coffee Beans or Corn to Soybeans…each commodity has it’s own risks and variables that a meteorologist has to understand. In addition to global supply and demand principles…Ag meteorologist should understand how certain weather conditions affects each individual crop to the slightest detail.
Let me give you an example. I have a friend who lives in Merced located in the “agricultural heartland” of California—the Central Valley. He grows Almonds. In the winter time, they are constantly checking the weather to see If the temperature will dip below 28F at anytime of the day to avoid frost damage and a total wipeout of their crop.
Between 27F and 28F…there is still a chance that the Almond crop will survive. Under 26F, it is likely that (within 24-48 hours)…the crop will be totally wiped out from frost. And wind and moisture also make a difference, too. And it could potentially ruin livelihoods for that year if proper precautions are not put in place by the farmer just for that one single day (or hourly period). That’s how fragile the weather is for Almonds and how accurate meteorologists need to be when forecasting for these guys. And each commodity has their own example of their own individual thresholds, too. Pretty cool stuff!
Agricultural Meteorologists also forecast for hedge funds and traders. Why? Perhaps Hedge funds want to speculate on the price of Corn and they buy Corn Futures or Options on the CME exchange. They’ll hire Ag meteorologists (or companies) to monitor the weather risk to the global supply of Corn. Keep in mind…that corn (and other commodities) are “global commodities”…and the US weather is just one piece of the puzzle affecting the price of Corn. It’s based on worldwide supply and demand…and so Ag meteorologists need to be familiar with weather phenomena around the world where Corn (for example) is produced.
Many energy companies also utilize Ag meteorologists. One example is how Corn is used to make Ethanol…which many of you know one use case is a fuel used in some of today’s cars. Knowing the supply/demand of Corn based on weather fundamentals can help vary the price of Ethanol on the market which some energy companies would be concerned about.
Bottom line, agricultural meteorologists are extremely important and valuable in today’s economy. They make a direct impact on livelihoods for farmers, and can be helpful in hedging risk for hedge funds, traders, food companies, etc. I believe there is definitely a future for Ag meteorologists and I would put Ag meteorologists in a “growth area” within the future of meteorology. By the way, there are some schools that offer a Masters or PHD in Agricultural meteorology including Iowa State and Purdue University, to name a few. Great options to get your feet wet from an educational perspective if you’re specifically interested in Ag meteorology.
Some companies that have Agricultural meteorologists on staff are WSI, Commodity weather group, Chesapeake Energy, MDA EarthSat Corporation, Accuweather, Televent DTN, government entities (NOAA, DOA). If I’m missing any (I know I am) or if you’re an employer thinking of hiring for an Ag meteorologist…feel free to put your company name and contact info in the comment box below. And as I said before, there are many Ag meteorologists working for themselves and have their own consulting firms. Would also love to hear any perspectives of Ag Meteorologists out there! Thanks….