Tuesday’s record high U.S. corn yield and production estimates hit the corn market hard, with an unexpected rise in acreage adding weight to the blow. However, the August crop estimate, which was based on a survey of farmers, is far from the last word on yield or production. In fact, since 2000, in most years when USDA’s August yield estimate has come in above its July trendline estimate, the final yield has wound up below the August estimate, although often by a relatively small amount.
In total, USDA’s August yield forecast has come in above the July projection 14 times since 2000 and in 11 of those 14, or 78.5% of the time, the final yield was lower than the August estimate. The yield decreases averaged 3.0% in a range from 0.2% to 7.5% (in 2010). An average drop from August this year would put the final U.S. yield at 183.1 bushels per acre, just 2.1 above USDA’s July trendline estimate. In six of the 11 years, though, the drop from August to the final yield was 1.4% or less, so odds favor the final yield staying above 186 bushels.
The final yield was higher than the August estimate only three of 14 years, with the additional yield increases in 2004, 2009 and 2014 running 7.7%, 3.1% and 2.2% respectively. The average yield set a new record high in all three of those years. A modest increase of 2.2% over the August yield this year would mean a final yield of nearly 193 bushels per acre. While we don’t anticipate that happening, it is certainly possible. Regression analysis of this Monday’s U.S. crop rating of 72% good/excellent versus final yields suggests a yield of 192.09 bushels.
One thing that stands out about this year is that there are no significant corn states where a poor yield is expected. The August yield estimates represent record highs in five of the top six producing states, with Nebraska the exception. The projected Iowa yield would be a record high by 11 bushels, with the projected Minnesota yield seven bushels above the current record. Overall, eight of 18 states USDA includes in its weekly Crop Progress Report are projected to have record yields, with several others being near misses.
USDA expects planted corn acres to be the second highest on record, at 97.254 million, behind only 2012, when severe drought derailed the crop. Projected harvested acres of 88,691 million would easily be a new record high, surpassing 2013 by 1.23 million. It’s possible some acres have been lost to flooding since USDA’s survey, but barring a major disaster like the 2020 Midwest derecho, harvested acres should be record high. Amazingly, the rise in acres from the June Crop Acreage report came with no increase in the top two corn states of Iowa and Illinois. The biggest increases were in the Plains – Kansas, North Dakota and South Dakota; with acreage also rising by 150,000-190,000 in Nebraska, Minnesota, Ohio and Wisconsin. The only significant decrease in acres was in Missouri.
