Sunday, August 17, 2008

Weather affects every aspect of the economy

Author: Chris Orr

c. 2004 Chris S. Orr CCM

Weather affects every aspect of our lives. It impacts our pocketbooks, our menus, our schedules and even our health.

We are aware of how cold weather drives up the price of natural gas and propane (just look at your heating bills from this year!) and how our insurance costs are adjusted for the amount of storm damage we sustain. Changes in the weather, either real or predicted, will affect the price of everything we buy, from peas to plywood. Sometimes the effect will be in our favor, sometimes it won't. How much did you pay for vegetables last winter? Why are limes -- small and hard as they are -- so expensive right now? Is the quality of lettuce comparable to its price?

Contract prices on the Chicago Board of Trade are very weather sensitive. Weather has such a huge impact on the commodities market that traders and analysts pay hundreds and even thousands of dollars a month for commentaries on long-range weather forecasts. These commentaries make the rounds among traders and analysts two or three times a week. Based on these commentaries, the price of grain, cattle, beans, and all sorts of agriculture products is driven up or down.

Traders look for the elusive normal weather. If the summer rainfall forecast for the C Corn Belt of Nebraska, Iowa, and Illinois is for above normal rainfall, futures may rise in anticipation of the crop getting too much moisture, stunting its growth. The same principle applies if the forecast is for too little rainfall. If the forecast calls for near normal rainfall, invariably the price of corn will fall in anticipation of a very good crop and too many bushels of corn on the market in the fall and winter. In other words, if the trading price is high, you'll pay more at the grocery store; if it is low because of ""normal"" weather, you pay less.

Are you planning to do a little construction later this summer? Buy plywood before the first tropical storm forms over the Atlantic Ocean. The price of plywood soars as tropical storms and hurricanes approach the coast of the United States. People in the path of these storms buy up plywood to ""batten down the hatches,"" creating local shortages. Those shortages are filled by drawing on supplies from the rest of the country, limiting stocks and driving up prices.

Accurate weather forecasts help some businesses compete. The retailer Sears, Roebuck and Co. had its own meteorologists for many years so they could sell items based on the weather. Fans and air conditioners were in stock before a heat wave hit. Umbrellas went on sale when it rained. Subway's corporate headquarters tracks individual store sales against the weather. It uses a history of weather and store sales along with the forecast to predict store volume. Their stores in southern California even give discounts on rainy days.

Let me pose a question to you…how much do you think the weather affects your daily schedule? Now, I don't mean being a minute late to work because you had to run back in the house and grab an umbrella, but how does the weather seriously impact your plans? Are you flying anywhere this summer? Fog, thunderstorms, freezing rain and heavy snow still halt flights and probably will for many years. It is just too dangerous to fly in any of those conditions. You'd think that with all of our technology we could fly aircraft into any sort of weather! You can avoid the inconvenience of flight delays by planning around the weather. Fog is most common in late fall and early spring, and usually lifts to a tolerable level by 10 a.m. Los Angeles, Denver, Salt Lake City and San Francisco get a lot of early morning fog during the winter. Plan to arrive at those destinations during the afternoon to avoid flight delays.

On the other hand, summer thunderstorms rattle the windows around Denver during the late afternoon and evening, while Phoenix sees windy evening thunderstorms. Arrive by mid afternoon to avoid these nuisance storms. If you are heading into the Midwest, thunderstorms tend to roll into Chicago and St. Louis after midnight, delaying red-eye flights. Just a little planning will save you the hassle of finding something to do at the airport while waiting for the next flight, or worse yet, missing a connecting flight and ruining your vacation.

Did you know that today's weather will affect the aches and pains you will feel in two or three days? At least that is what some physicians believe. I always thought today's weather brought me today's aches and pains, but it appears the human body has a lag time of several days. It is possible to predict when you and I will feel these aches, pains and migraines a day or two in advance. Think of how wonderful it will be in the future when you can call the doctor and the appointment desk will have an opening available for you because your medical records matched the criteria for today's aches-and-pains index!

The use of weather information goes far beyond, ""partly cloudy with a 30 percent chance of rain."" The price of food and the convenience of having items stocked at your store, the mini-golf place open when you'd like to go and the supply of electricity for your home are all governed by the weather. Your physical health is affected by the weather. Many of the things you will do this day will be based on the weather - past, present and future.

About the author: Chris Orr is a Certified Consulting Meteorologist with more than 25 years of experience. His private practice includes work as an expert witness, weather forecasting and forecaster training. His column appears in the Rapid City Journal every Sunday. He can be contacted at weather@rapidwx.com or through his Web site www.rapidwx.com .

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