Heat stress is the dairy industry’s $1.5 billion annual challenge, causing production losses that traditional insurance can't address. Arbol’s heat stress products offer location-specific protection based on Temperature Humidity Index (THI) and verified weather data, not damage assessments.
Used by 5,000+ Agency Partners
Even mild heat stress can reduce milk yield by 10%, while severe conditions can cause losses exceeding 25%. Traditional coverage options don’t address the reality that heat stress impacts occur without physical damage to facilities.
Arbol’s heat stress products are structured around precise THI calculations and weather data, offering automated payouts when temperature and humidity conditions exceed livestock comfort thresholds.
THI threshold, stress hours, or temperature extremes
Set trigger thresholds (e.g. THI >78 for 5+ consecutive days) by farm, county, or processing region
Arbol tracks daily temperature and humidity data
If the trigger is met, payment is issued—no livestock assessment needed
These solutions help brokers, dairy cooperatives, and agribusinesses manage the $13 billion global impact of heat stress, preserve cash flow during extreme weather, and build climate resilience into dairy operations.
Daily Maximum Temperature
Temperature Threshold vs. Historical Average
Low
Feed suppliers, equipment companies, and service providers
Payout when temperature exceeds 105° F for 5+ consecutive days
Temperature + Humidity Combined (THI)
% of Historical Average Maximum (e.g. 110%)
Moderate
Large dairy operations with multiple locations
Payout when max THI exceeds 110% of 20-year average
Cumulative Weighted Heat Exposure
Texas A&M Weighted System
High
Individual farms focused on cumulative damage
Payout when total weighted stress hours exceed 150
Production Loss
THI >78 for 5+ consecutive days
Insurance
Milk yield reduction of 15-25%
Supply Disruption
Avg max THI exceeds 110% of historical avg
Derivative
Member farm delivery shortfalls
Processing Volume
Stress hours >150 in Jun-Aug period
Insurance
Processing capacity underutilization
Customer Demand
THI >72 for 10+ days in growing season
Derivative
Reduced feed sales to heat-stressed herds
Equipment Utilization
Cumulative THI >2000 during peak season
Insurance
Lower equipment demand during heat stress
Production Loss
THI >78 for 5+ consecutive days
Insurance
Milk yield reduction of 15-25%
Supply Disruption
Avg max THI exceeds 110% of historical avg
Derivative
Member farm delivery shortfalls
Processing Volume
Stress hours >150 in Jun-Aug period
Insurance
Processing capacity underutilization
Customer Demand
THI >72 for 10+ days in growing season
Derivative
Reduced feed sales to heat-stressed herds
Equipment Utilization
Cumulative THI >2000 during peak season
Insurance
Lower equipment demand during heat stress
Heat stress solutions may be offered as insurance or derivatives depending on the jurisdiction, client structure, and regulatory requirements. Insurance products are offered through Arbol Insurance Services, a licensed general agent. Derivative solutions are not insurance and will not indemnify direct physical losses to livestock or facilities.
Based on independent, transparent data (PRISM, ERA5, Texas A&M THI calculations)
Triggers customized by region, herd type, and risk tolerance using proven dairy science research
Works with brokers to structure legally compliant products for dairy industry regulations
Offers flexibility: pure hedge or regulated insurance depending on client structure and jurisdiction
THI is a scientifically recognized metric that combines ambient temperature and relative humidity to assess heat stress in livestock. Arbol calculates THI using validated weather data from trusted third-party sources like PRISM, ERA5, and research institutions such as Texas A&M. This ensures that all triggers are based on standardized, objective inputs—not subjective on-farm assessments.
Yes. Arbol offers flexible, multi-trigger structures that can include THI-based heat stress along with additional perils such as drought, rainfall, or even milk yield benchmarks (in some cases). This allows dairy operations and cooperatives to align risk protection with their broader climate exposure and business objectives.
Yes. If you are offering the product as insurance, you must be a licensed insurance agent or broker. If structured as a derivative, regulatory requirements vary by jurisdiction and client type. Arbol will help you determine eligibility and licensing based on your region and client profile.
Insurance: Offered through Arbol Insurance Services, a licensed general agent. Provides regulated coverage with defined benefits, ideal for traditional dairy operations and cooperatives.
Derivative: A financial instrument linked to weather outcomes, offering faster execution and more customization. Suitable for entities that do not need indemnification but want to hedge financial exposure from heat stress.
Yes. Arbol’s THI-based heat stress products are not limited by farm certification status. Whether you operate a conventional, organic, or specialty dairy, coverage can be tailored to reflect your location, herd sensitivity, and production model.
Yes. While Arbol does not directly offer milk price-linked derivatives, our team can help structure solutions that align with market conditions, seasonal yield patterns, and operational risk. In many cases, heat stress protection is layered with seasonal production windows, delivery expectations, or historical output benchmarks to provide meaningful revenue support.
