Fundamentally Speaking

The USDA is scheduled issue the final crop production report on January 11, 2019. There may be a change from the 2018 national wheat yield estimate of 47.6 bushels per acre (bpa) given in the September small grains summary report.

In February, USDA will issue their first take on the 2019/20 balance sheets including planted acreage, yields and demand projections at their annual Agricultural Outlook Forum.

This graphic shows actual U.S. wheat yields from 1989 with the 2018 number the September 2018 projection, the 10, 20 and 30-year trend lines and includes what the USDA has projected for U.S. wheat yields at their Ag Outlook Forum starting in 1998.

In the box the chart shows the expected 2019 trend yield and what yield the USDA should show in February, along with the average annual trend increase for all the time periods.

In recent articles, we have discussed the appearance of an upward paradigm shift in U.S. row crop yields. However, this does not apply to wheat yields where adverse weather in the Plains along with limited development of higher yielding seeds compared to corn and soybeans has resulted in U.S. wheat yields coming in below the 10, 20 and 30-year trend four of the past five growing seasons.

Yields over the past ten years have risen at an annual rate of 0.392 bushels per acre, which is below the 20-year trend of a 0.426 bpa per year increase and 0.417 bpa for the 30-year trend and 0.421 bpa for the USDA Ag Outlook projections.

Using the existing datat to extrapolate the 2019 yield from the 10-year trend shows estimates of 48.3 bpa vs. 48.2 for the 20-year trend and 48.1 for the 30-year trend.

A trend of the 1998-2018 USDA Ag Outlook wheat yield estimates implies a 47.5 bpa yield estimate for the 2019 Ag Forum.

(KLM)

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