Want to bet on hurricane season?
Since 2007, the Chicago Mercantile Exchange has traded hurricane futures as a way for companies with a stake in the outcome of Mother Nature’s wrath to lessen their risk.
The market grew out of the disastrous 2005 hurricane season, which caused an estimated $80 billion in damage, according to CME Group, which developed the futures products.
What started out as a necessity for insurance companies and energy companies has spread to include pension funds, hedge funds and even state governments.
Payouts are based, not on the more familiar Saffir-Simpson scale, but on a specially designed hurricane index that uses sustained wind speed and the radius of hurricane-force winds to measure a storm’s damage potential.
Buyers can place a bet on everything from the seasonal storm damage totals to where individual hurricanes will make landfall and how severe they will be.
Not your thing? You can always play it safe with a well-stocked hurricane supply kit and well-planned evacuation route.
NAPLES — July is in the weather books, but Southwest Florida could be about to hit its tropical stride in August.
The Atlantic didn't spawn a hurricane last month, something that hasn't happened since 2009, and a lack of rainfall in July kept the region one of only two spots in Florida that are still in drought or near-drought conditions, according to the U.S. Drought Monitor. The other is in the Florida Panhandle.
"We're usually complaining about having too much water and not being able to play golf," said Darren Davis, superintendent at Olde Florida Golf Club in Collier County.
Just a couple days into August, though, and the hurricane season looks to be cranking up. The National Hurricane Center is keeping an eye on a tropical depression about 800 miles east of the Windward Islands that forecasters say stands a good chance of becoming Tropical Storm Ernesto.
A quiet July in the tropics doesn't necessarily mean a quiet August, National Hurricane Center spokesman Dennis Feltgen said.
"2004 is the poster child for that," Feltgen said.
That's the year that four hurricanes tromped across Florida in the two months following a stormless July. They included Hurricane Charley, which walloped north Lee County and Charlotte County after a close call with Collier.
A lack of storms in July isn't all that rare. It's happened in more than half of the years since hurricane trackers started keeping records in 1851, Feltgen said.
NOAA's Climate Prediction Center forecasted the 2012 hurricane season would have between nine and 15 named storms, between four and eight of those becoming hurricanes. Of those, one to three were predicted to be major hurricanes. An updated hurricane forecast is due next week.
Much of its focus will be on the staying power of El Nino, the nickname for a warming trend in the Pacific Ocean that can create atmospheric conditions that hamper hurricane formation.
A "borderline" El Nino developed in July, with warmer ocean waters but without any atmospheric response yet, said Jeff Masters, director of meteorology for Internet-based weather site, Weather Underground.
"It often takes a month or two for the atmosphere to catch up to the ocean," Masters said.
Closer to home, Southwest Florida's rainfall still is trying to catch up from a drier-than-normal dry season — and July didn't help, South Florida Water Management District meteorologist Geoff Shaughnessy said.
July — with seven inches of rain, almost two inches below normal — capped the fifth-driest stretch from the November start of dry season in Southwest Florida since 1927, Shaughnessy said.
June, typically the wettest month, also saw about seven inches of rain, more than three inches below normal, according to district figures for Southwest Florida.
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- WEB CAMS: Southwest Florida web cams
2012 Hurricane Season
July and early August are typically drier months before the onset of highly variable rainfall that comes with the height of the tropical storm season, Shaughnessy said.
"It's a little early to be overly concerned just yet (about water shortages)," he said.
Still, the dry conditions are being felt from the region's golf course greens to its citrus groves.
Not at Olde Florida Golf Club, but some courses with outdated irrigation systems and stressed out grass will forego normal summertime maintenance activities like aeration and thatch reduction for fear of killing the grass, said Davis, at Olde Florida Golf Club.
Citrus groves use ultra-low volume irrigation devices to put water at the base of their trees, some of which are putting on fruit for a first harvest in September, Gulf Citrus Growers Association director Ron Hamel said.
But relying on irrigation instead of rain means running pumps, which means using diesel and running up a grower's cost of doing business, he said.
"It's usually more this time of year trying to get water off (the groves) than getting water on," Hamel said.