Fine Tuning Corn Yields

USDA rolled out another crop production report Thursday, Sept. 12, with the companion World Agricultural Supply and Demand Estimates (WASDE). Unlike the two most recent editions, this report was a lot closer to trade expectations, generally going in the same direction. Estimated planted and harvested acres were left unchanged from last month. There are still questions about whether permitting corn to be grown as a cover crop will result in a higher abandonment/silage number, resulting in fewer acres harvested for grain. National Agricultural Statistics Service (NASS) indicated that it might not resolve that question until after the big post-harvest farmer survey in December. Producers are asked to specify silage acres in that survey, with results released in January on the mega report day.

NASS cut projected national average corn and soybean yields, which most producers had argued was necessary. The average soy yield was reduced 0.6 bushels per acre (bpa) to 47.9 bpa. The average yield for corn was trimmed 1.3 bpa from last month to 168.2 bpa. Projected average corn yields were reduced from last month in 19 states, and increased in four. In the garden spot of the U.S. this year, the Nebraska, Iowa and Missouri yields were left unchanged from last month's estimates. Now the fine-tuning begins. Out of the past 20 years, NASS has been too low on final yield in the September report 11 times and too high nine times. The average miss is 3.1% or 269 million bushels (mb). There are a number of ways to get from September to the final number, however.

First, we have to remember the methodology NASS is using. The primary horse the analysts are riding is the farmer survey, with 9,624 completed surveys for this September report. NASS fills in the data holes from the farmer surveys with satellite data and with their own objective yield plots. There were 2,905 objective yield plots visited between Aug. 24 and Sept. 1. The satellites tell you what crop is there, and via Normalized Difference Vegetation Index (NDVI) can give you some correlation between the image and historical yield. Where the satellite images pair up with ground observations, you can calibrate the satellite data. This is the area where most of the ag and weather industry satellite forecasts fall apart. They don't have enough ground truth samples because they don't do as many farmer surveys or objective yield plots. The latter is very important because they give you ear counts, ear girth and length that are nearly impossible to measure from a satellite no matter how good your camera is.

Speaking of ear counts, they are down this year. Here are the September ear counts per acre for the 10 states tracked for this purpose. None of them have a record-high ear count, as late planting, poor soil conditions, compaction and other issues took a toll. Final ear counts are usually lower than the September number. Compare the Final 2018 to the Sept. 18 column for a general idea.

Corn Ears
Per Acre	Final	Final	Final	Final	Final	Final	Sept	Sept	Max
	2013	2014	2015	2016	2017	2018	2018	2019
IL	30150	30100	30800	30450	30250	31500	31550	30300	31550
IN	29850	30450	29150	29250	28850	29750	30000	28900	30450
IA	29550	30150	30850	30500	30600	30800	31150	30250	31150
KS	22200	24000	23650	22450	22650	21700	22350	21550	24000
MN	30850	30950	30450	30250	30600	30800	30850	30050	30950
MO	27100	27900	26850	27150	27850	27300	27400	26950	27900
NE	25700	26200	26700	25400	25950	26800	27100	25850	27100
OH	28300	29600	29600	29600	29150	30300	30750	29850	30750
SD	25300	24450	25750	25450	25850	28050	28100	26450	28100
WI	28950	28600	28600	28750	28550	30450	30700	29850	30700
Average	27795	28240	28240	27925	28030	28745	28995	28000

This is the lowest ear count per acre since the 2012 drought. A quick and dirty, unweighted average for the 10 states puts the ear count at 28,000 in September, down 3.5% from last September. If ear weight was identical, you'd expect yield to be 3.5% smaller, i.e. 170.34 bpa. This is only from 10 states, and USDA is actually using something north of 28,100. National average ear weights can vary from a little over .31 pounds per ear to a bit over .36 pounds. Number of kernel rows, kernel depth and ear length all enter into that part of the equation.

With the exception of 2018, final ear weights were higher than the one used in September. Since very few of the objective yield plots have been harvested and sent to the lab yet, the ear weight for 2019 is derived from the farmer survey/published yield and the ear count. Producers are basically saying the grain weight is going to be the lightest since 2014 due to smaller ears.

To wrap up our little exercise, that yield number is still a moving target. Just about all the data we have at our disposal suggests a below-trend yield, but how much below is a question mark. The elephant in the room -- the delayed maturity of the crop -- suggests we still have considerable risk of a freeze hitting before all the crop makes it to black layer (maturity). That would hurt grain weight by stopping starch deposition.

If something like that happens (the GFS and European models are in some disagreement right now) we also have to remember that it does not typically hit all states equally. If you get a 10% loss on a state that has 3% of U.S. production, that is only a .3% hit on U.S. production.

It is a big deal if it is your corn, but otherwise not so much.

Alan Brugler may be reached at alanb@bruglermktg.com

(BE/BAS)

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