August 26, 2016
Opening Up the Black Box: More on the USDA Corn Yield Forecasting Methodology
We have written extensively about U.S. corn yield forecasts issued by the National Agricultural Statistics Service (NASS) of the USDA. As indicated in these previous publications, NASS uses two surveys to provide indicators of corn yield prior to harvest. These include the Agricultural Yield Survey (or farmer-reported survey) and the Objective Yield Survey (or field-measurement survey) in major corn producing states. A formal Agricultural Statistics Board (ASB) of NASS statisticians is convened in each month of the forecasting cycle to review yield indicators and determine an official yield forecast. In our previous publications we focused on the survey procedures used by NASS and had relatively little to say about the methodology used by the ASB to combine the various yield indicators and determine an official yield forecast. This omission reflects the fact that NASS has historically provided very little information about this part of the forecasting methodology. Fortunately, several publications have appeared in the scientific literature during the last several years that provide important insights into the nature of the different survey yield indications and the other non-survey information used by the ASB to determine official published yield forecasts. The purpose of this article is to review the information in these scientific articles and provide a more informed understanding of the role of the ASB in generating these important market-moving forecasts.
August 25, 2016
Mapping the Farm Bill: Expanding the Traditional Farm Coalition
Previously, we mapped the traditional farm coalition of corn, cotton and wheat with recently updated production data. In this article, we again draw from the USDA's Major World Crop Areas and Climate Profiles (MWCACP) atlas to expand on the traditional farm coalition with soybeans, peanuts and rice.
August 24, 2016
Will Crop Insurance Pay in 2016?
With harvest approaching, questions on whether crop insurance will make payments this year are beginning to arise, particularly for corn where the prospects are for the harvest price to be below the projected price. In this article, we evaluate whether crop insurance will make payments for Midwest farms purchasing Revenue Protection (RP). Current futures prices are used to estimate harvest prices. For corn, payments could occur if actual yields are slightly below guarantee yields. For soybeans, payments are unlikely.
August 23, 2016
What a Difference $.50 (or a Summer) Makes
High levels of corn and soybean production in 2016 have led to low projections of commodity prices and returns for 2017. Had more normal yields occurred, the 2017 return outlook could have been different. A $.50 increase in corn and soybean prices results in near financial stability on many farms.
August 22, 2016
Weekly Outlook: Corn and Soybean Storage
The current USDA projections indicate that U.S. corn and soybean supplies will be record large for the 2016-17 marketing year that begins on September 1. The corn supply (production, carryover stocks, and imports) is projected at 16.909 billion bushels, 1.512 billion bushels larger than last year's supply and 1.43 billion bushels larger than the record large supply of two years ago. The soybean supply is projected at 4.346 billion bushels, 201 million larger than the record supply of last year.