University of Illinois ag economist Darrel Good likes patterns. It helps give him historical perspective on corn yield trend lines, for example.
Good began by looking at performance of corn yields versus the yield trend line during the past 20 years. He found that yield beat the trend line in eight years, was roughly equal to the trend line in eight years, and below trend in four years.
“The U.S. average corn yield was below trend yield in 2002, but at or above trend yield for eight consecutive years from 2003 through 2010,” he says. “That experience seemed to confirm the role of technology in maintaining high corn yields and that a risk premium in the corn market was not needed. In retrospect, however, the long period of favorable yields reflected a period of benign weather conditions rather than ‘bullet proof’ genetics. That point was solidly made in 2012.”
Where does that leave the as-yet-planted 2016 corn crop? The exact nature of the 2016 crop season is not predictable, he notes, but Good has his sights set on two weather-related events in particular that could spell elevated risk for corn falling below trend line yields this year. The first has already happened.
“[It] is the historical record for extremely wet conditions in the Midwest during November and December to be followed by a higher-than-average incidence of corn yields below trend value,” he says. “Total November and December precipitation in the Midwest in 2015 was record high.”
The other weather factor Good is watching is the weakening of the current El Niño event. Historically, El Niño events in January that ended by July is also associated with a higher-than-incidence of corn yields below trend value, he says.
Currently, NOAA is predicting that the Northern Hemisphere will return to ENSO-neutral conditions by late spring or early summer. And by the May/June/July time window, the CPC/IRI has forecast probabilities as follows:
- La Niña – 10%
- ENSO-neutral – 46%
- El Niño – 44%
For more of Good’s commentary on summer weather, corn yield trends, supply and demand particulars and more, visit http://farmdocdaily.illinois.edu/2016/02/weather-market-for-corn-2016.html.
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