Extrapolating Yields from USDA's Crop Conditions
It’s about this time of year that USDA’s Crop Condition reports can be used, in part, to develop corn and soybean yields.
The agricultural economists at the University of Illinois have been tweaking yields out of the USDA crop conditions reports for quite some time. They say the later in the season it gets the more accurate they become. Right about now is usually when the good to excellent ratings, along with all the rest, begin to zero in on what’s really happening across America says Darrel Good, "We do know that the initial ratings for both crops are generally a bit on the high side. That is crops always look good early in the season before weather has had its chance to take a toll on the crop. And then on average ratings decline as you go to the final report of the year. If you recognized that bias, and correct the weekly observations for that bias the in-season ratings can be very useful because there is a very high correlation between final ratings and yields."
Typically, says Good, by mid-July the ratings for corn are pretty close. This is on average. That point is later in the season for soybeans, usually sometime in early August. Here are the yields the U of I has generated from this week’s USDA Weekly Crop Progress and Conditions report (July 30, 2017).
Darrel Good - If we relied entirely on the crop conditions model, today’s ratings would point to of 167.2, with soybeans at 47.7."If we relied entirely on the crop conditions model", says Good, "today’s ratings would point to of 167.2, with soybeans at 47.7. Again, I’m not sure I would ever rely one-hundred-percent on crop conditions as a way to form crop expectations, but as one component it does give you a good barometer or where we are."
One other note here on making calculations. A one percent move in the good and excellent category is worth about 7/10ths of a bushel says Darrel Good. This week corn is 15 points lower in those categories than last year when the national yield was 174.6. If you add in the trend line bump and do the math, it’s in that 166–167 range.