Friday the USDA will issue its estimate of planted acreage, along with current grain stocks. While those will not have anything to do with yield of the new crop—analysts will be multiplying the acreage by various yield scenarios to estimate 2012 production. Probably most will be using yield numbers well below the 166 bu. per acre that the USDA is using for corn. What should that number be?
Since most of the Corn Belt is in the critical stage of corn pollination where water is needed, University of Illinois economists Scott Irwin and Darrel Good have evaluated the potential for various yields. Good and Irwin report, “As of June 24, 71% or more of the crops in Minnesota, North Carolina, North Dakota, Pennsylvania, and South Dakota were rated in good or excellent condition. Weather conditions have been far less favorable in the areas traditionally identified as the Eastern Corn Belt and in a few states in the western Corn Belt. As of June 24, 51% or less of the crops were rated in good or excellent condition in Colorado, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, and Tennessee.
Those are among the 18 major states which raise 92% or more of the US corn crop. Nearly 40% of the corn in those states is in poor to very poor condition, while about the same amount is in good to excellent condition. And just over 20% is in good condition. But they rhetorically ask, “What level of yield should now be expected?” Among the unknowns are the weather for the balance of the growing season, and whether temperatures and precipitation will be above or below average. Because of the current conditions, they contend an above trend yield cannot be expected.
What about a trend yield? Good and Irwin say that would result if the above average yield acres would equate to the below average yield acres. However, they say:
- There are currently 72% more corn acres in those states experiencing very poor growing conditions than in those states with very favorable conditions.
- The yield impact of weather is not linear. That is, poor weather tends to reduce yield proportionately more than good weather increases yield.
- If the current and upcoming period of above average temperatures extends further into the growing season, additional yield losses would be expected.
The economists believe the current trend in the 2012 corn crop points to an average yield that is below the trend line, but the volume of the shortfall will remain uncertain until harvest begins. And they add, “With the large increase in corn acreage this year, an average yield above 150 bushels would require minimal rationing during the year ahead.” And they further say because of current and expected weather conditions, “there is risk that the average yield will fall below that level, requiring higher prices to ration the crop.”
The first USDA national yield estimate—which will be based on field observations—will be August 10 at the August Crop Report.
Currently, USDA is using a trend yield of 166 bushels per acre to forecast production, but with corn pollination at hand and hot and dry conditions that have reduced crop ratings substantially, how has that impacted the yield potential? States with the bulk of the corn are in poorer condition than states with corn in good condition, so they will not average out, and the yield should drop from where it is. A yield around 150 bushels per acre would require minimal rationing, but the yield potential may be lower than that.
Source: FarmGate blog