- I don’t remember when Brian Duffy published this cartoon in the Des Moines Register, but I think it was 1993. It was posted on a ISU professor’s door during all my years at Iowa State…and that was a really long time… The great part about ISU, at least at that time, was that it wasn’t even an AG professor’s door!
What a difference from just a few weeks can make…
As if producers aren’t hurting enough with low prices, we’re facing the most challenged planting season since 2013, and I would argue this year has a strong chance of turning out worse than 2013 by the time #Plant19 crosses the finish line. The big difference between then and now was that, by early-May in 2013 conditions were getting better, which hasn’t been the case this year, and soil temperatures were nearly 10 degrees warmer. Yes, the American Farmer can put the crop in the ground in a real hurry, but many of the acres this year have yet to even receive fertilizer or pre-plant herbicide. So what does this mean, if anything, for our likelihood of producing another bin-busting crop?
The first issue is to quantify just how late we really are. I’m sure many of you have seen a version of this chart showing USDA-NASS planting pace over the years:
This chart shows the percentage of the final acreage planted each year by NASS crop week #. On Monday NASS reported the Week 18 national progress total to be 23%, shown in the red line (the green line was last year). As you can see, we are already into rare territory, with only 5 years later since 1980. My hunch is that we will only be about 35% planted on Monday’s report, which would put us at the third slowest pace since 1980.
If we compare planting pace on Week 18 or Week19 to the percentage change from March acreage intentions to final planted acres, I think it is very reasonable to say there is a “messy” correlation:
The big yellow dot shows where we were on Monday; using the “best fit” line, at 23% complete on Week 18, the most likely outcome would be a 2.3% drop in acres from March intentions.
If we only get to 35% planted nationwide through Sunday, that guesstimate shifts down to a 3% drop in acres. I think it’s important to remind both me & you that this is a pretty loose correlation. Based on the scatter of the historical data, we might not lose any acres, or we could lose over 10%. My hunch is that there will ultimately be a 3%-4% drop in acres vs intentions. Taking a Prevented Planting claim on crop insurance is never an enjoyable experience, but for folks who haven’t even had a chance to do fieldwork yet, given the ongoing slump in prices, there is a very good chance that PP will soon be the most profitable choice.
Regarding yield, the correlation isn’t quite as tight, but I believe a correlation exists. The first thing to do is make a guesstimate of trend-line yield; here’s mine:
Using WASDE data going back to 1975, there is a very strong, linear trend of increasing yields, with the past 5 years well above the trend line. Using my chart, this year’s trend yield would be about 172.3. USDA tends to use a trend yield in the May WASDE report (coming out tomorrow, by the way), so I expect they’ll use something like that, or even a little higher.
The DIFFERENCE between the yield trend line and the actual yield for each year is often called the yield “anomaly” (it’s as if God made the mistake in not nailing the trend yield…). By plotting the historical yield anomaly for each year against the Week 18 planting pace, you can see there’s sort of a positive relationship (with the exceptions of 1988 and 2012, which were planted very quickly in drought conditions):
Using the “eyeball-o-metric” line, at this point we should be expecting the most likely outcome to be a -2.9 bu/acre reduction in yield vs trend. While it’s true that there are some years where a similar planting pace ultimately resulted in >5% over trend yields, those years tended to occur in the 1980’s, when it was still customary to start planting later anyway.
The impact of a 2.3% reduction in planted acres, combined with a -2.9 bu/acre yield would be YUGE! Plugging those numbers into next year’s expected corn balance sheet would drop production below 14 billion bushels, which implies significant rationing of demand to keep the carryout above 10% stocks/use. However, since USDA will release the May WASDE report tomorrow, and with the market getting kicked in the groin again today, I really don’t feel like talking about what that would imply for corn prices. I will re-hash this stuff this weekend (after the report).