When you’re talking about the prospect of a bin-busting corn yield of 175.1 bpa this fall, as USDA forecast on Friday, it’s worth being a little skeptical.
“I think the market is taking that number with a little grain of salt,” said Ted Seifried of Zaner Ag Hedge, speaking on U.S. Farm Report with host Tyne Morgan. “The way USDA calculates its August yield is by taking an ear count--which is not a kernel count—and then they are applying their statistical analysis of the crop conditions, which is a 74% good to excellent. When you put that all together, it come up with a 175.1 national average, which is a huge number.”
But estimates, real-world sampling, and running combines in the fields are very different things.
“I think that once they get out into the fields to start actually pulling cobs and doing kernel counts, which will happen with the September report, that number could come down a bit,” Seifried added.
He pointed to 2014, which posted a record-breaking national yield of 171 bpa. “I think the feeling in the trade might be that we’ve just seen the largest field estimate that we’ve seen,” Seifried said. “If you go back to ’14, you had the same sort of thing, when USDA got almost up to (an estimated national yield of) 175 and then had to reverse themselves back down.”
Seifried isn’t the only analyst thinking that USDA may have gone a little high in its August numbers. “A number like that (175.1), in our experience, could have easily taken us limit down and brought us to multi-year lows,” said Tommy Grisafi of Advance Trading, also speaking on U.S. Farm Report. Yet corn prices dropped just 7 cents after the report came out, suggesting that perhaps the big number wasn’t quite as big a deal to the trade as people might have expected.
“We always have this tendency to try to factor in a bigger yield than what the reality is,” Seifried acknowledged. “More often than not, things are not as good as they seem—and not as bad as they seem. This might be the same case here this year.”
Indeed, while Wisconsin and southern Minnesota growers are reporting favorable growing conditions and top crop conditions, other states are dealing with flooding or pockets of drought.
In North Dakota and northwest Minnesota, for example, crops are trying to recover from countless heavy rainfalls this summer. “The worst crops I’ve seen in 20 years,” a farmer from Walsh County, N.D., reported grimly on AgWeb’s Crop Comments section. “Have had 20 inches of rain in the last two months. Soybeans on the hills are now turning yellow. Edible beans are completely gone. Some wheat looked OK until a hailstorm came through and wiped a lot out. Lot of auction sales will be coming next spring.”
In parts of Ohio, New York, and Michigan, farmers are reporting dry, parched soils and struggling crops. “All you with such great crops should be thankful,” one farmer in Darke County, Ohio, told AgWeb’s Crop Comments section. “We here in Ohio (have not gotten) rain and our crops all drying up. Beans are very short. A total disaster in the making.”