Predicting the weather one year in advance

September 28th, 2011

Weather Trends International is doing it with algorithms.

 The private firm based in Bethlehem, PA, uses technology first developed in the early 1990s, to project temperature, precipitation and snowfall trends up to a year ahead, all around the world, with more than 80% accuracy. Translation: they gather up tons and tons of data, literally as much historical information on weather around the world as is out there, and then cram it into some 5.5 million lines of proprietary computer code (their algorithm) to spit out weather forecasts up to a year in advance. This is fairly different from what most meteorologists do by modeling the atmosphere. “Only about 15% of what we do is traditional forecast meteorology,” says CEO Bill Kirk, a former U.S. Air Force Captain with a degree from Rutgers in meteorology. Kirk began working on the WTI algorithm while in the Air Force.

Since launching in 2003, WTI has carved out a nice business for itself by marketing weather predictions to a range of clients, from commercial retailers and manufacturers (Wal-Mart, Target, Anheuser-Busch, Johnson & Johnson), to financial services firms and commodity traders– all of whom depend on the weather. Consumption of beer, for example, varies greatly with the temperature. “For every 1 degree hotter it is, Anheuser-Busch sells 1 percent more product,” says Kirk. And since beer is often made and bottled months in advance, the sooner they can know how hot it will be in May, the sooner they can plan accordingly. Unlike a lot of professional predictors, WTI’s business model has a built-in incentive structure: “Our clients are making multi-million dollar decisions based on our forecasts. If we’re not right, they’re not coming back.”