 "Models relating trend yield and state average monthly
precipitation and temperature to actual state average yields in
Illinois, Indiana and Iowa indicate that August weather has a
significant impact on average yields," said Darrel Good.
"While August precipitation has less impact than July
precipitation on average yields, August temperature appears to
have an equal or larger impact than July temperatures, based on
research by Mike Tunnura of the U of I Department of
Agricultural and Consumer Economics."
Good's comments came as he reviewed corn yield expectations.
Corn prices have declined sharply since mid-June, reflecting
a combination of a slowdown in the rate of exports and growing
confidence that the 2007 crop will be large. The USDA's June
Grain Stocks report also implied a substantial decline in the
rate of domestic feed and residual use of corn, and the USDA
Acreage report showed a larger-than-expected increase in planted
acreage of corn.
"By the end of July, the market had grown increasingly
confident that the 2007 U.S. average corn yield would exceed
trend value and would exceed the early USDA calculation of
average yield based on trend, planting date and normal weather,"
said Good. "That calculation of 150.3 bushels per acre, along
with the projection of 85.4 million acres of corn harvested for
grain, results in a 2007 production forecast of 12.84 billion
bushels.
"At that level of production, the USDA projected that stocks
of corn would grow from 1.137 billion bushels on Sept. 1, 2007,
to 1.502 billion bushels on Sept. 1, 2008."
Pointing to July weather that was generally favorable for the
completion of pollination, many analysts anticipated a crop in
excess of 13 million bushels. Yield expectations as high as 160
bushels have been reported, suggesting a 2007 crop of 13.66
billion bushels. Pointing to declining crop condition ratings
and a warm start to August, however, yield expectations as low
as 145 bushels have also been reported.
"An average yield at that level would suggest a 2007 harvest
of only about 12.38 billion bushels," Good noted. "Expectations
now seem to be centering on a range of 148 to 153 bushels."
The USDA has been providing weekly reports of observed crop
conditions in the major corn-producing states since 1986. Over
that period, there has been a relatively strong relationship
between the U.S. average trend-adjusted yield and the percent of
the crop rated in good or excellent condition in the last report
of the season.
"Using the trend increase in yields since 1960, the
relationship explains about 80 percent of the annual variation
in trend-adjusted yields from 1986 through 2006," said Good.
"Using the trend increase in yields since 1986, the relationship
explains about 88 percent of the annual variation of
trend-adjusted yields, according to an analysis provided by
Scott Irwin of the U of I Department of Agricultural and
Consumer Economics.
[to top of second column] |
 "If crop conditions at the end of the season remained near the
levels reported on July 29, 58 percent good or excellent, the models
would project 2007 average yields of 145 bushels and 148.4 bushels,
respectively. Over the past eight years, these models have tended to
underestimate the U.S. average yield."
For the model based on the trend yield since 1960, the size of
the underestimate ranged from 1.75 bushels in 2000 to 10.25 bushels
in 2004, Good added. The average underestimate was 4.9 bushels.
For the model based on the trend yield since 1986, the size of
the underestimate ranged from 0.44 bushels in 2000 to 7.41 bushels
in 2004. In 2006, however, the model overestimated the U.S. average
yield by 0.42 bushels. Over the past eight years, the average
difference between the forecast yield using this model and actual
yield was 2.85 bushels.
"Based on current crop condition ratings and the average model
errors over the past eight years, 2007 yield potential appears to be
in the range of 150 to 151 bushels," said Good. "Yield expectations
based on current crop conditions can obviously only be used as a
guide in forming expectations about actual yield since the
correlation between ratings and yield is less than perfect and
ratings may change by the end of the season."
The USDA will release the first yield and production forecast for
the 2007 crop on Aug. 10. The forecast will be based on a
combination of factors, including field observations in 10 states
and national farm operator surveys (about 27,000 in 2006).
"That input will reflect conditions through early August, so that
subsequent forecasts will be influenced by August and September
weather," said Good. "Over the past 11 years of generally favorable
growing conditions, the average yield forecast in August was below
the January estimate following harvest in eight years.
"In those eight years, the January estimate exceeded the August
forecast by an average of 5.8 bushels, in a range of 1.7 to 11.5
bushels. The January estimate was below the August forecast in 1999,
2000 and 2006, by an average of 2.9 bushels and in a range from 0.9
to 4.8 bushels."
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental
Sciences]
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