Case studies
Punkin Center Gins

How we helped a cotton gin in Texas protect its revenues against adverse weather

Aug 11, 2022
Cotton gin in Texas, tractor farming cotton

Summary

To establish a safety net for his business as protection against another missed crop, Punkin Center Gins owner Al Crisp enrolled his business in Arbol’s first-of-a-kind Area Yield Program for cotton. Arbol’s Cotton Yield Program leverages independent climate data from dClimate to provide protection for businesses in the cotton industry against yield losses. Having AYP helped save his business.

Key takeaways

Having AYP provided Punkin Center Gins financial protection against weather events resulting in low cotton yields.
Having key pieces of risk infrastructure in place, like insurance and parametric protection is critical for agribusinesses affected by climate events. Without risk management tools in place, even the most successful agribusinesses can suffer.
Punkin Center Gins received a large, speedy pay out to cover the losses the business experienced due to low crop yields.
cotton field during a sunset in lubbock, texas

The problem

Punkin Center only processed sixty-six hundred bales of cotton during the year it enrolled in AYP. To put that in perspective, that represents only enough cotton for just a little bit over a week’s worth of ginning during a normal year.

  • Without cotton coming into process, Punkin Center’s core business is hurt. 
  • Climate events like drought, flooding, etc. that adversely affect crop yields are unpredictable but financially harmful. 
  • The financial threats of weather are real and growing for millions of farmers.
"
…the 6,600 bales we ginned was just about enough to pay the light bill…with very little cotton there was no income so this (settlement from Arbol) was going to be a large chunk of the income that comes in for my bank this year.
Al Crisp
Owner, Punkin Center Gins

our solution

Area Yield Program: A first of Its kind solution offered by Arbol
Businesses like Punkin Center Gins can take out a policy covering specific counties, and when the applicable dataset indicates cotton yields are below the elected trigger, an automatic, rapid payout is triggered. AYP is backed by tamper-proof U.S. Department of Agriculture data from dClimate. Arbol’s Area Yield Programs allow gin operators and other cotton businesses to get paid quickly and objectively based on independent data as a hedge against bad weather impacting yield.

the results

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