Transcript powerpoint - National Wine Marketing Conference

Managing Weather Risk is Smart Business…
Weather is Making Headlines...
In 1994, when temperatures
remained below zero for the
first two weeks of January,
Debevc said he lost 20 percent
of everything he had planted.
“We lost all our Chardonnay
vines and about two-thirds of
our Riesling,” he said. “We had
to replant, and it took three
years for them to produce. But
then we only had seven acres of
vinifera. Now we have 65
acres.”
Extreme freeze damages Ontario vineyards decanter.com-13 hours ago. “Freezing temperatures
across Ontario have damaged vines in the Canadian
province's vineyards, with some producers reporting bud
loss of around 90%...’Our winery has 95 to 98% bud loss,
so we won’t be getting grapes this year,’ says Tom O’Brien,
owner of Cooper’s Hawk Vineyards in Lake Erie North
Shore...”
Ashtabula County grape growers prepare for huge losses
The Star Beacon-Mar 29, 2014. “We will not know the
amount of damage to the vines until we warm up...”
Ohio wine grape losses hit hardest in Northeast ... Cleveland.com - The Plain Dealer-Mar 24, 2014 CLEVELAND, Ohio -- Ohio grape growers – the spark of
our fast-growing, $500 million wine-tourism industry -are expecting a near-total loss ...”
Winter's wrath threatens grape crop in Chautauqua
County - Buffalo News-Feb 13, 2014. “The bud damage
means a smaller crop for wine grapes this year...”
Who is eWeatherRisk?
•
We are a weather risk platform that provides
real-time weather risk management solutions.
•
eWeatherRisk’s weather data is independently
sourced and independently verifiable, and
comprises over 6,000 ground-based
NOAA/NWS weather stations.
•
Multiple risks, dates and structures can be
used, all simultaneously and all independent.
•
eWeatherRisk’s products are backed by
MunichRe, a AA- Standard and Poor’s rated
international reinsurer with over $17B in
assets.
What is a Weather Hedge?
•
A risk contract that provides any business a
method to mitigate financial risk from adverse
weather events.
•
Weather contracts are used extensively by large
corporations to manage weather risk.
eWeatherRisk brings the same program to all
businesses.
•
There is no adjuster - it pays when the chosen
weather event happens.
•
Temperature and precipitation can be covered
for any date and condition.
•
Weather contracts complement traditional crop
insurance, or act as a stand-alone solution for
those in related businesses or uninsurable crops.
Bottom line: Provides a new risk management tool.
What types of products are available?
Weather Contracts Cover:
Weather Risk Solutions…
Temperature
Weather contracts provide unmatched flexibility,
pricing and delivery in real-time, incorporating
nearly 65 years of weather data from over 6,000
ground-based weather stations and supported with
the financial security of an S&P-rated AAinternational reinsurer.
•
•
•
•
Excessive Heat
Insufficient Heat
Excessive Cold
Insufficient Cold
Precipitation
•
•
•
Excessive Precipitation
Insufficient Precipitation
Highest Daily Rainfall in Period
A full complement of standard and
hybrid weather risk contracts are
available.
Client specific weather risk. Weather protection to exact needs.
The eWeatherRisk platform allows for
maximized pricing and flexibility.
Winter Kill on Grapes Protection
Winter Kill On Grapes
100 Acre s @
$250/Acre of
Prote ction
Ohio
Weather Station
Chardon
Contract Value
$25,000
Start Date
11/1/14
End Date
3/31/15
Average Low Temperature in
Period (⁰F)
Historical Low Temperature in
Period (⁰F)
Payment Begins Below (⁰F)
-11
-26
-15
Contract Value Paid At (⁰F)
Payout per Degree
$2,500
Rate
16.04%
Price
$4,010
Cost Per Acre
$40.10
Low Temp(⁰F)
Payout
-25
-13
$
-
-14
$
-
-15
$
-
-16
$
2,500
-17
$
5,000
-18
$
7,500
-19
$
10,000
-20
$
12,500
-21
$
15,000
-22
$
17,500
-23
$
20,000
-24
$
22,500
-25
$
25,000
Excess Rainfall on Grapes Protection
100 Acre s @
$250/Acre of
Prote ction
Excess Rainfall On Grapes
Ohio
Weather Station
Chardon
Contract Value
$25,000
Start Date
5/1/14
End Date
6/30/14
Highest Precipitation in Period
15.84
Average Precipitation in Period
8.42
Payment Begins Above
11.00
Contract Value Paid At
16.00
Payout per 1/10 Inch
$500
Rate
21.29%
Price
$5,322
Premium Recovery At
12.06
Cost Per Acre
$53.22
Precip Amount (inches)
Payout
10.0
$
-
10.5
$
-
11.0
$
-
11.5
$
2,500
12.0
$
5,000
12.5
$
7,500
13.0
13.5
14.0
14.5
15.0
15.5
16.0
$ 10,000
$ 12,500
$ 15,000
$ 17,500
$ 20,000
$ 22,500
$ 25,000
Heat on Grapes
Ohio
Heat on Grapes
100 Acre s @
$250/Acre of
Prote ction
Weather Station
Chardon
Contract Value
$25,000
Start Date
7/1/14
End Date
8/15/14
Daily High Temperature
Threshold (⁰F)
Average Heat Units* in Period
86
27
Maximum Heat Units in Period
141
Payment Begins Above
30
Contract Value Paid At
141
Payout per Heat Unit
Heat Units
Payout
35
$
1,126
Rate
21.94%
Price
$5,485
Cost Per Acre
$54.85
45
$
$225
3,378
55
$
5,631
65
$
7,883
75
85
95
105
115
125
135
145
155
$ 10,135
$ 12,387
$ 14,640
$ 16,892
$ 19,144
$ 21,396
$ 23,649
$ 25,000
$ 25,000
What are the advantages of using weather contracts?
Features
Benefits
• Coverage - 6,000 ground-based
• Adaptable - The program is built by
US weather stations
growers!
• Flexibility - Ability to customize • Cost-effective - each weather
transactions to specific weather
risks
• Timeliness - Settlement can be
solution is customized to the customer
• Hassle-Free - No proof of loss
required.
executed within days.
• Availability - No sales closing
period and advance purchase
discounts are available.
• Security - eWeatherRisk is
backed by a AA- S&P-rated
international reinsurer.
• Transparent - weather data
available daily via the web
• Protects:
• input costs
• profitability
• forward contract delivery
obligation
• allows for more profitable
marketing decisions
Weather risk can be effectively managed.
Managing Weather Risk is Smart Business…
Questions and Answers
Brian O’Hearne | President & CEO | [email protected]
Jim Jubb | Vice President – Marketing | [email protected]
John Coleman | Senior Analyst | [email protected]
eWeatherRisk, Inc.
5251 West 116th Place, Suite 204
Leawood, Kansas 66211
800 603 3605