June 10, 2002
Intended U.S. corn crop dwindles as potential yields fallWEST LAFAYETTE, Ind. Despite warmer and drier conditions over much of the Midwest, planting remains behind average, which may put corn production in jeopardy this year according to a Purdue University agricultural economist.
As of June 2, Indiana, Ohio and Illinois still had 3.7 million acres of corn unplanted while Wisconsin and Michigan had one-half million acres left to plant, said Chris Hurt, agricultural economist. Hurt said two important factors may put this year's corn supply in a tight spot the impact of late planting on national yields and the possibility of shifting acres from corn to beans.
"The summer weather will determine if the size of this year's crop is in trouble, but the odds of having a smaller crop have expanded," Hurt said. "At this point, normal yield potential has been reduced, but the national yields can ultimately still be at, or even above, expectations.
"I think the market has certainly escalated corn prices somewhat," he said. "The market cannot say yet whether we have had a major yield reduction, but I think the market is positioning itself so that it can go higher if we get into summer and there are adverse weather conditions."
Planting in the Eastern Corn Belt has been delayed, and Hurt said statistical analysis shows that national yields could be reduced by 4 or 5 bushels per acre based on trends from 1980 to 2001. Hurt said he expects national yields to be around 133 bushels an acre if the weather remains average for the rest of the growing season.
"Historically, summer weather has caused a fluctuation in yield of 11 bushels higher or lower than average," Hurt said. "This means there is about a two in three chance this year's national yields would fall between 122 to 144 bushels an acre. It remains possible that yields could still be at or above the 137.9 bushel per acre estimate from the U.S. Department of Agriculture, but those odds should be reduced due to delayed planting."
Hurt said that acreage has tended to shift out of corn in previous wet springs during the 1990s and final planted acreage was below intentions by an average of 1.7 million acres. The largest national reductions came in 1993 and 1995 when more than 3 million acres intended for corn were not planted. Planting progress for this year is slightly behind 1993 but ahead of the much delayed 1995 crop, Hurt said.
"We have gone back and studied these late years and about half of the acreage reduction shows up in USDA's June acreage report and the other half shows up in the final acreage report in January," Hurt said. "We may only see this number down in the 600,000 to 800,000 acre range in the June acreage report, but by the time we get to the final report, we could see a reduction around 1.5 million acres."
The greater use of crop insurance this year also increases the odds of farmers simply taking the prevented planting payments and foregoing an attempt to raise a corn crop on some unplanted acres, Hurt said.
"If we assume final corn acres are down 1.5 million acres from intentions and yields are 133 bushels per acre, then the crop would drop from the USDA's early estimate of 9.9 billion bushels to about 9.4 billion bushels, which is a decline of over 500 million bushels.
"In Indiana, crop budgets show the date to shift from corn to soybeans has passed if the highest expected return per acre is the decision criteria. Given average corn and soybean loan rates and a 10 percent yield loss for soybeans planted on soybean ground in 2002 and 2003, the advantage to plant beans over corn is $36 per acre by a June 10 planting date," Hurt said.
Writer: Jennifer Doup, (765) 494-6682, firstname.lastname@example.org
Source: Chris Hurt, (765) 494-4273, email@example.com
Purdue News Service: (765) 494-2096; firstname.lastname@example.org