Fundamentally Speaking

The USDA Ag Outlook Forum concluded last week and in this post we look at USDA's 2021 yield forecast at 179.5 bushels per acre (bpa) which would be a new record high exceeding the prior peak of 176.6 bpa seen in 2017.

Though 7.5 bpa above last year's final yield, it is only one bushel higher than what they had projected in 2020.

This graph shows the USDA corn yield estimate at their annual February Agricultural Outlook (AO) Forum and the final figure in bpa on the left hand axis vs. the percent their Ag Outlook projection differed from that year's final yield figure.

Also reported is the percent that the final U.S. corn yield deviated from the 20-year trend, both on the right hand axis.

Trend lines for both the AO and final corn yield figure are also included.

We calculate the 20-year trend at 176.0 bpa and note that the U.S. corn yield has been under trend for the past two years in a row, sort of an unusual occurrence.

The USDA Outlook yield at 179.5 bpa is above this trend figure though a trend of their projections indicates an even higher 181.2 bpa yield that they could have used.

We note in the box that since 1998, the USDA Feb Ag Outlook yield numbers have averaged 2.0% higher than final figure.

If this year's 179.5 bpa projection is 2.0% above the final this would also translate into a 176.0 bpa yield which is probably not a bad place to start this year.

A look back suggests USDA does reasonable job given that have no idea what summer weather will be like with notable misses in good weather years like 2004 and 2009 and bad weather years like 2002 and 2012.

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