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September 2013 Archive for From the Editor

RSS By: Brian Grete, Pro Farmer

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

What is a 'better-than-expected' yield?

Sep 27, 2013

Hello Pro Farmer Members!

We're getting some early harvest results in and most of the corn yield reports are "good." (I know... that doesn't tell you much. Does it?) It's that time of the year when we get to wade through piles of yield reports that attempt to describe yields, but often times add confusion rather than clarity for market participants. I don't mean to "scold" anybody for any harvest reports they've published either on web sites or on Twitter, but I do want to offer up some suggestions on information to include in harvest reports in order to put some perspective on what actual yields might mean for national average corn and soybean yields.

"Better than expected."

That one's my favorite... how do I know what you expected? Or... better yet... how do you know what I expected? It's easy to improve this one: "Yield is 150 bu. per acre, better than the 140 I expected when I opened the field."

"Better than average."

That's a little better than "better than expected," but not much. Again... it's easy to improve: "Yield is 150 bu. per acre, 10 bu. better than field APH."

"Good," "Average" and "Poor"

Those are all good words to use in describing yields, but only if we know the yield potential (or APH) for the field. A "good" corn yield on an Illinois field with an APH of 135 bu. per acre will still be pulling the state average yield down... even if it is "good" for that field.

Yield reporting made simple --

My favorite harvest reports read something like this:

"Bremer Co. IA: 200-acre field beat its 150 APH by 12 bu. Moisture is 18% and TW is 53-54 lbs. I thought yield and TW would be a bit better."

That report example isn't a snapshot of a field. It drives me crazy when I see "My yield monitor says 220 right now!" A better yield monitor report is something like, "Half done with an 80-acre field and yield monitor average is 150. What's left in field will be better. 160 APH ."

The key to a "good" harvest report is to give a benchmark. And the best benchmark to give, in my opinion, is the APH.

All of those comments are in preparation for...

... what is sure to be a flood of yield reports over the next 2 weeks. I don't want to get all stereotypical on farmers, but corn and soybean yields are almost always better than expected. That's because farmers instinctively stay conservative with expectations and are "surprised" when yield monitors and scale tickets prove their expectations too low. Therefore, they report "better than expected" yields.

But just because yields are better than expected, that doesn't mean yields are better than USDA has estimated or even better than we've estimated. It could mean that... but in doesn't necessarily mean that. Most important, it doesn't mean yields are better than markets have factored into current prices.

Everybody loves harvest reports... hours are spent reading crop comments on various web sites and in 140-character bites on Twitter. Which reminds me... the above example of what I like to see in a harvest report has 139 characters (including spaces), so a harvest report with location (Bremer Co., IA), that is quantifiable (200-acre field), has a benchmark (150 APH), reports the yield (beat 150 APH by 12 bu.), includes some "extra" info (moisture and TW) and even mentions how the yield compares to expectations can be done quickly and in a tweet.

That's it for now...

I've scheduled another sky-scouting trip for Oct. 1, so watch for my video reports again next week!

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

Big shift coming in 2014 crop mix?

Sep 20, 2013

Hello Pro Farmer Members!

We're well aware some of you are not going to be happy that we're sticking with our national average corn yield estimate of 154.1 bu. per acre. But we've got to stick with what we think we know, and like we explained in this week's newsletter we think there are enough ears out there to support our yield estimate. The reason we remain below USDA's corn yield estimate of 155.3 bu. per acre is because we see average ear weights declining a bit from when USDA surveyed for the Sept. 1 yield estimate.

What we won't see is another big-time increase in the number of ears per acre. That should be set for remaining yield estimates.

For soybeans, it was time to reflect what you've been telling us... what our eyes are telling us... and what weather conditions were telling us. That's why we knocked a bushel off the national average soybean yield this week, to 40.8 bu. per acre.

After running through the new certified acreage data from FSA, we also decided we had to adjust our harvested acreage estimates. We added some acres to both corn and soybeans. The end result of the steady yield estimate, but higher acreage estimate for corn was a 40-million-bu. increase in out crop peg to 13.5 billion bushels.

For soybeans, the increase in harvested acres was more than offset by the lower yield estimate and we ended up with a crop peg of 3.097 billion bushels.

Our soybean crop estimate is 52 million bu. below USDA's current bean crop estimate. If this crop estimate is plugged into USDA's S&D balance sheet and no changes were made to any of the usage categories, carryover would drop to 98 million bushels.

That's not going to happen... USDA might drop the crop to 3.097 billion bu., but the smaller supply would be at least partially offset by lower use and (theoretically) a higher price projection. The problem is USDA's current total demand estimate is already at 3.14 billion bu., which is 15 million bu. less than used in the 2011-12 marketing year and only 41 million bu. more than used in the record-price-setting 2012-13 marketing year. So, if the market is forced to slow down use enough to hold carryover even steady at 125 million bu., it will take prices higher than currently factored into prices.

It's not to early to start looking at the 2014-15 marketing year

Informa Economics, Inc., today reportedly released its acreage updates. The full release reportedly included Informa's projections for 2014 plantings with corn at 92.7 million acres (USDA is at 97.4 million for this year) and soybean plantings at 83.6 million (USDA is at 77.2 million for this year).

Those big shifts (down 4.7 million acres on corn plantings and up 6.4 million acres on soybeans from this year) are what the market is telling us for the 2014 crops. We're having a tough time knocking back corn acres that much from current levels as we look out into the 2014-15 marketing year, but the economics of the markets certainly suggest a major turn in crop mix is ahead for next year.
 

That's it for now...

... be sure to check out the video clips of my sky-scouting trip over northeastern Iowa and southeastern Minnesota earlier this week.

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

Don't write-off USDA's 155.3 corn yield. Use it!

Sep 13, 2013

Chip Flory

From The Editor

September 13, 2013

Hello Pro Farmer Members!

Everybody wants to "write-off" USDA's yield estimate of 155.3 bu. per acre for corn. Don't do it. Use it!

Ear populations are the key. USDA added about 1,000 ears to the population compared to the objective yield data in the August Crop Production Report. Some question how that could happen. Well... the ears probably weren't there when some fields were evaluated in August. What that means is these fields were exceptionally late in ear development, or that some late-emerging plants in fields finally shot an ear. No... that kind of inconsistency is not how "big yields" are built, but counting ears really isn't that difficult.

The other piece of information in the objective yield data is ear weight. Right now, USDA estimates an ear weight that's just above that seen in 2011, but below the 2010 average ear weight. The September average ear weight was also down slightly from the August estimate of ear weight. So ear weights are "trending" lower.

For the October Crop Production Report, do not expect another 1,000-ear increase in the average population. Ear populations should be close to steady with the roughly 28,400 estimated in the September crop report. That will work to hold the yield steady.

That means the average ear weight is the variable that will change yields from September to October. Because ear weights declined from August to September and because conditions were detrimental to kernel fill after the objective yield data was collected for the September production estimate, I've got to lean down on ear weights in the October update. That should pull the yield down from 155.3 bu. per acre. If ear weights decline from about .311 lbs per ear to .305 lbs. per ear (a reasonable prediction), that's a 1.9% decline in average ear weight. Take the same amount off of USDA's 155.3 bu. per acre, and it lands the yield at 152.3 bu. per acre.

So... you can anticipate some changes in the final yield, but don't write off USDA's current 155.3 bu. per acre corn yield. Use it to anticipate what might happen to the yield in the October Crop Production Report.

Soybeans are another story

In this week's Pro Farmer newsletter, we explained that USDA's objection soybean yield data included the second lowest pod count (in 18 sq. feet) since 2004 and the second heaviest average pod weight since 2004. Only the 2012 bean crop sported a lower pod count and a heavier average pod weight.

The 2013 bean crop is not getting the kind of finish it needs to build the kind of pod weight currently estimated by USDA. There's little question (in my mind, anyway) that bean yields will trend lower in the October Crop Production Report.
 

That's it for now...

... be safe as you get ready for harvest or even open up some fields in the week ahead.

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

Frustrating week for many corn farmers

Sep 06, 2013

Chip Flory

From The Editor

September 6, 2013

Hello Pro Farmer Members!

Tough week. A downside reversal on the daily chart for December corn futures started the week. It ended with a higher market and near today's session high, but it's still down 13 3/4 cents on the week. It was a tough week for a lot of growers to stomach. These guys held their frustration in check last week during the first heat wave of the year. But this week with very little rain and still-too-hot temps was too much and frustrations started to boil over.

And then harvest started in some key areas of the Corn Belt and yield results were... well... very good. But, this is the earliest planted corn that established a lot of its yield potential before hot and dry conditions really choked down the corn and bean crops. So, earliest-planted is earliest harvested and this year it should have the best yield potential. It will be interesting to see what happens when growers open up fields that were planted on May 25 that are completely brown right now... I bet it won't be 200-bu.-plus! The early harvest results were considered "piling on" by many in the areas with the most hurdles to clear this year..

Since corn and soybean plantings were wrapping up in June, the group at Pro Farmer has been cautioning it would take a long time to figure out actual crop potential. First, too much ground went unplanted. The impact of that won't show up until the October Crop Production Report.

Second, the impact of late-plantings on corn and soybeans normally isn't exposed until combines roll. We expected a normal growing season from the end of the planting season, which would have meant a lot of the late-planted corn and soybeans wouldn't be harvested until late October or even early November. That's why we figured the impact of the late-plantings on yields wouldn't be fully realized until the November Crop Production Report.

Well, after two weeks of terribly stressful conditions on corn and soybeans, harvest on the latest-planted crops will probably happen sometime in October. The push heat and dry conditions have given development of the crops will probably get most to maturity before October 1, but it still may take some actual October harvest results before USDA is able to give more clarity to the size of this year's crops.

I get the frustration... but it's still a waiting game. The downtrend in corn prices won't reverse until a majority of the money in the corn market is convinced the fundamentals of the market have changed. At this point, it looks like we'll have to wait until November before that happens.
 

That's it for now...

... be safe as you get ready for harvest or even open up some fields in the week ahead.

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

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