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East–West Crop Divide

July 9, 2009
By: Sara Schafer, Farm Journal Media Business and Crops Editor
 
 

Linda Smith, Top Producer Executive Editor
 
Iowa's soybean yields may be above trend and the average of the past three years, while those in the Eastern Corn Belt are more likely to fall below. That's the bottom line for a study based on planting delays by University of Illinois ag economists Scott Irwin and Darrel Good and meteorologist Mike Tannura. "We anticipate that the 2009 average yield in Illinois will likely be below trend value, though slightly above the three year average of 46.2 bu. For Indiana, prospects appear to be near the trend value and average of the past three years [47 bu.].”
 
Among the many factors other than weather that can influence soybean yields, planting date has been demonstrated as important, they say. First, farmers plant earlier now than decades ago. Soybean planting in Illinois has moved two weeks earlier than in 1965.
 
Second, agronomic research indicates late planting in a given year generally results in lower yields. One study last year found that yields decline at an accelerating rate for planting dates after late April and that the effect was more than previously thought.
 
Using a weather model, the University of Illinois researchers figured yields with good and poor June-August weather scenarios (see table). The U.S. forecasts also factor in late planting in other states, such as Kentucky, Missouri and Tennessee.

 

 

(click to enlarge)

Source: University of Illinois

 

Which Way Will Weather Go?

Widespread late planting of corn and beans in Illinois are causing a few problems. Crop health as of 7/6 is "suffering” compared to recent years, particularly in the SE and S Central part of the state. Illinois Farm Reports show good and excellent condition at 57% for corn and 60% beans, lower than all neighboring states except Missouri.

 

(click to enlarge)

Source: QT Weather

Market implications from Good:
  • Expected yields point to an ample crop and lower prices, particularly if South American production rebounds.
 
  • Producers in Illinois and Indiana have more yield risk due to late planting and may want to be more conservative in marketing.
 
  • Hopefully many producers took advantage of the earlier rally to price expected production that exceeded crop insurance coverage.
 
  • Current new crop futures are right at the spring price guarantee for crop revenue insurance, suggesting no further price risk on insured bushels until after harvest.

 


 
You can e-mail Linda Smith at lsmith@farmjournal.com.
 

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