Why Weighted Yields Won't Matter Much

April 19, 2016 09:04 AM
 
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Ag economist David Widmar just posed an interesting question. Because Kansas, Nebraska, North Dakota, Oklahoma, South Dakota and Texas account for 40% of the extra acres estimated in 2016, how might that affect total yields?

Since the USDA’s report, we have wondered about the potential implications that so many additional central plains acres might have on overall U.S yield potential,” Widmar ponders in his latest “Agricultural Economic Insights” blog.  “Specifically, would the additional corn acres in the lower yielding central plains states limit, or be a drag on the average U.S. yield?”

Widmer looked at data from the past 15 years to see how the national corn yield average reacts to different states carrying a higher or lower percentage of total acres.

What he found: the spread between these weighted averages did vary from the yield trend line, but not by much. The spread between the highest weighted average and the lowest was only 1.5 bu. per acre (1% of the total average).

“While distribution of corn acres across states impacts the overall U.S. weighted average yield from year to year, the impacts are very small and likely irrelevant,” Widmer concludes. “[It’s] much smaller than we, and likely others, expected.”

This makes sense when you think about the bigger picture, he adds. The “big four” corn production states of Illinois, Iowa, Minnesota and Nebraska account for nearly half (48.5%) of total corn acres. It would take a tremendous acreage shift in the other states to move the needle significantly in either direction.

“At the end of the day, there are a lot of acres, and the overall distribution doesn’t vary much from year to year,” he says. “As one might expect, growing conditions in the major corn-producing area will ultimately be the biggest driver of yields.”

Widner came to similar conclusions when analyzing the past 15 years of soybean yield data. For more of his analysis, visit http://ageconomists.com/2016/04/18/u-s-yield-potential-vary-state-acres/.

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Comments

 
Spell Check

Joe Schmoe
Anywhere, NE
4/19/2016 07:55 AM
 

  There you have it. The 93.6 million corn acres is accurate. Plantings are already ahead of 5 year average.

 
 

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