June 30 Acreage Report In Perspective

June 29, 2011 06:54 PM
 
By Steve Johnson
Iowa State University Farm Management Specialist 
 
A great deal of uncertainty surrounds the 2011 USDA Crop Acreage Report to be released on Thursday morning, June 30th. Because of late planting and flood related crop losses, acreage uncertainty will linger for several months. Traders are likely to look past the number of acres that were planted this spring following June 30th. Instead they will focus on how many acres will likely be harvested in this fall. This is the number that counts toward total crop production.
 
The table below features both corn and soybeans in millions of acres planted. The 2011 average and range of estimates appear in the left-hand columns prior to the June 30th report. These estimates are compared to previous estimates by USDA in June and March, as well as the 2010 crop final planting numbers.
 Trade Estimates vs. Previous USDA Reports
 
Crop
Avg.
Est.
Range
Est.
June 2011
 
March 2011
 
2010 Final
 
Corn
90.767
89.5-91.5
90.7
92.178
88.192
Soybeans
76.530
75.7-77.2
76.6
76.609
77.404
 
Source: Reuters, June 27th, 2011
 
 
Below are both U.S. Corn and Soybean Acres with line graphs that feature planted acres as the top line since 1990. The bottom line represents harvested acres. In recent years, that difference annually for corn has been roughly 8%. It represents acres not harvested for grain, such as seed corn, silage, food grain corn and acres that were planted but not harvested.  
Corn 2
Source: USDA NASS, March 2011
 
On June 9th, 2011, the USDA World Agricultural Supply & Demand Estimates (WASDE) report decreased the planted corn acreage number by 1.5 million to 90.7 million acres from March estimates. Surprisingly, USDA also decreased the harvested acres by 1.9 million acres. Thus the percentage difference was increased to nearly 8.3% to represent an additional 400,000 acres impacted by flooding as well as late planted acres that will not be harvested for grain.
USDA has not changed their soybean planted acreage estimates since the March 31st Prospective Report. The difference between planted and harvested aces for soybeans is typically 1% annually.
 
Corn Chart
 
When will USDA Next Reflect Harvested Acres
 
Following the June 30th Crop Acreage Report provided by the USDA National Ag Statistics Service (NASS), watch the July 12th WASDE report for changes in planted vs. harvested acres of greater than 1% for soybeans.
 
Subsequent changes in both planted and harvested acres from USDA will likely be minor until the October 12th report. That’s when USDA NASS reconciles to the USDA Farm Service Agency (FSA) certified crop acreage data collected nationwide from farmers.
 
Satellite Imagery
 
Another tool for estimating crop planted acres and acres lost due to flooding are satellite images provided by the low earth orbiting satellites. USDA reconciles to this data prior to the October report, but expect private industry to report estimates well in advance of October.
In a webinar on June 28th, 2011, featured spokespersons from Lanworth, Inc., discussed their models used to estimate acres. They indicated that the flooding from the Missouri River flooding will impact more acres than was realized from both the Ohio and Mississippi floods in May. They estimated that flood waters along the Missouri river could impact 400,000 acres of corn and 350,000 acres of soybeans. Their models indicated that U.S. corn yield trends could be slightly below trend yields based on their early models, but that U.S. soybean acres would be below trend. It is still too early to determine the total acres lost to flooding and the impact on final crop production that weather will have in 2011.
 
Conclusion
 
While the 2011 crop planted acreage numbers are anxiously anticipated, the harvested acres are a much more important component in determining the final crop production numbers. USDA uses extremely sound scientific measures in order to determine both acreage and yield estimates that lead to final 2011 production numbers released in January of 2012.
 
Given the tight global ending stocks for the marketing year that ends August 31st, the futures trade will look at a variety of methods to gain insight into the size of the 2011 U.S. crops. 
Expect an unusual number of private estimates reported by the media for both acres and yields that use a variety of traditional and emerging technologies.
 
Discern information that has been collected from meticulous scientific methods vs. private estimates that tend not to use sound sampling methods from large populations.
 
 
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