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Corn Yield Implications of Late Planting

University of Illinois Extension Agronomist Emerson Nafziger discusses the impact of late corn planting and how farmers should set about nitrogen applications this spring. He was interviewed May 1, 2019 by Todd Gleason.

The following summary is taken from a May 1, 2019 University of Illinois farmdocDaily article written by agricultural economists Scott Irwin and Todd Hubbs.

“The impact of late planting on projections of the U.S. average corn yield is an important question right now due to the very wet conditions so far this spring through much of the Corn Belt. We estimate that the relationship of late planting with corn yield trend deviations is highly non-linear, with a largely flat segment up to 10 percent above average late planting and then a steeply sloped segment for late planting that is 10 percent or more above average. This nicely matches the curvature of planting date effects on corn yield estimated in agronomic field trials (e.g., farmdoc daily, May 20, 2015; Nafziger, 2017). The key then for 2019 is whether late corn planting will be 10 percent or more above average, where the negative impact on corn yield is relatively large. Specifically, when late planting is 10 percent or more above average the chance of corn yield being below trend is 83 percent and the average deviation from trend yield is –6.1 bushels per acre. We analyze topsoil surplus moisture patterns in analog years to 2019 and the analysis suggests late planting this year is likely to be at least 10 percent. The implication is that there is a significantly elevated probability of a below-trend corn yield in 2019 and that present projections of U.S. average corn yield should likely be reduced to 170 bushels per acre or less. It is important to recognize that good summer weather conditions can offset the projected negative impact of late planting on the national average corn yield, but history indicates the probability of this happening is not very high if wet conditions in the Corn Belt persist through mid-May.” - Irwin and Hubbs, University of Illinois

Crop Insurance Loss Ratios in 2018


Gary Schnitkey from the University of Illinois discusses crop insurance loss ratios for 2018, the current outlook for payments in 2019, and the strategic economic models he’ll be developing for soybeans.

by Gary Schnitkey, University of Illinois
link to farmdocDaily article

Most 2018 payments on Federal crop insurance products have now been entered into the Risk Management Agency’s (RMA’s) record system and losses for 2018 can be stated accurately. Similar to 2016 and 2017, low losses again occurred in 2018. Losses were particularly low in Illinois and, more generally, the eastern Corn Belt.

Background on Loss Ratios

This article presents loss ratios, which equal payments on crop insurance policies divided by total premium paid on crop insurance policies. A loss ratio of 1.0 means that crop insurance payments are equal to total premium. Ratios above 1.0 indicate that payments exceed premium, which occurs with some regularity. On the other hand, loss ratios below 1.0 indicate that payments are less than premium. Given the way RMA sets premiums, loss ratios should average slightly below 1.0 over time. Given the high correlation of losses across policies in a year, variability in aggregate loss ratios will occur from year to year.

Data reported in this article come from the Summary of Business which is available from the RMA website. Data were downloaded in late April of 2019. Some changes to loss ratios will occur over time as more loss data become available. However, 2018 loss performance will not materially vary from loss ratios presented here.

Loss Ratios in 2018

For all insurance products, the 2018 loss ratio was .69, indicating that crop insurance payments were less than total premium. Overall, 2018 was a low loss year, continuing a string of low loss years that have occurred since 2013 (see Figure 1). Loss ratios exceeded 1.0 in the drought year of 2012 when the overall loss ratio was 1.57. Payments also exceeded premium in 2013 when the loss ratio was 1.03. Since 2013, loss ratios have been below 1.0 in each year: .91 in 2014, .65 in 2015, .42 in 2016, .54 in 2017, and .69 in 2018. These low loss years correspond to relatively high yielding years in corn and soybeans (farmdoc daily, April 16, 2019).



The overall loss ratio is highly influenced by the performance of corn and soybeans, as these two crops account for 56% of total premium. In 2018, corn policies had 32% of total premium while soybeans had 23%. In 2018, loss ratios were .43 on corn and .56 on soybeans. Since 2014, both crops have had low loss ratios. Corn loss ratios were .46 in 2015, .27 in 2016, .37 in 2017, and .43 in 2018. Soybean loss ratios were .55 in 2015, .21 in 2016, .30 in 2017, and .56 in 2018.
2018 Loss Ratios by County

Many counties in the Corn Belt had very low loss ratios, as would be expected given that corn and soybeans have very low loss ratios. Figure 2 shows loss ratios by county for all policies in that county. Loss ratios below .4 predominated in a stretch of counties beginning in eastern Iowa, going through Illinois, Indiana, and ending in Ohio. Low loss ratios also were in western Corn Belt counties including Minnesota, North Dakota, South Dakota, and Nebraska. In contrast, there was a concentration of counties along the Iowa-Minnesota border that had higher loss ratios above 1.0.



Other sections of the country had higher loss ratios. Loss ratios above 1.2 predominated in North and South Carolina, Georgia, Florida, northwest Missouri and eastern Kansa, and western Texas.
Summary

Overall, loss ratios were low in 2018, continuing a string of years since 2014 that have had low loss ratios. Low loss ratios occurred primarily because of low losses on corn and soybean policies in the Corn Belt.

It Still Takes Two Weeks to Plant the American Corn Crop

Most people take for granted that the farmers can plant their crops way faster today than ever before. While it is true today’s equipment can plant a single acre of corn much faster, it still takes about the same amount of time to plant the whole crop.



It’s an illusion and pretty simple math says University of Illinois Agricultural Economist Scott Irwin, "This is a situation where your eyes can deceive you. So, you drive out in the countryside and you have a friend that is a farmer. They have a big planter and can plant their individual farm, in these particular cases, clearly much faster than they used to (be able to plant them). I don’t disagree with that individual anecdotal observation. The problem is that this doesn’t necessarily add up to the whole."



Sure, the equipment can get over a single acre way faster but each piece of equipment is going over way more acres than used to be the case. Consequently, it takes about the same time to plant the whole U.S. corn crop today as it did forty-years ago says Irwin, "It is a near constant, there is some variation from year to year, but on average it looks like it takes a minimum of 14 good field days to get the U.S. corn belt planted with basically everyone able to, and willing to, run flat-out."

In 1980, for instance, Illinois farmers were able to plant about one-million acres per day. Last year, running flat-out that figure was approximately the same.

Good Yields! Yes but a Warning | an interview with Gary Schnitkey



by Gary Schnitkey, University of Illinois
read farmdocDaily article

On a national basis, corn and soybean yields were near record-breaking levels in 2018, with exceptional yields in central Illinois and the eastern United States contributing heavily to those near-record U.S. yields. Other areas had below-trend yields. The county yields for corn and soybeans presented in this article illustrate these facts. Much higher U.S. yields are possible if all areas have exceptional yields. However, all areas including Illinois should not expect above-trend yields in every year.

Corn Yields

The 2018 corn yield for the United States was 176.4 bushels per acre, just .2 bushels below the record yield of 176.6 bushels per acre set in 2017 (all yields in this article are from QuickStats, a website maintained by the National Agricultural Statistical Service). From a national standpoint, corn yields were excellent in 2018.

Contributing to these high yields were counties having average yields above 220 bushels per acre. Several of these counties were in the Northwest U.S. and Nebraska where irrigation often is used in corn production (see Figure 1). In predominately non-irrigated counties, there were a concentration of counties in eastern Iowa and extending through central Illinois with over 220 bushels per acre average yields (see Figure 1). Three counties in this region, all in Illinois, had average yields over 240 bushels per acre: Douglas County (246.0 bushels per acre), Piatt (241.8), and Warren (241.7). Eleven counties – again, all in Illinois – had average yields between 230 and 240 bushels per acre: Macon (239.9), Sangamon (236.4), Logan (236.2), Tazewell (235.4), Effingham (235.2), Coles (234.2), Stark (234.0), Moultrie (233.9), Hancock (233.9), Christian (232.9), and Mercer (231.3). Eighteen counties had yields between 220 and 230 bushels per acre: 6 counties in Iowa and 12 in Illinois.



High yields are a measure of good growing conditions, but it does not take into consideration the inherent productivity of soil. Yield deviations from trend consider an area’s productivity. For each county, a 2018 trend yield was calculated using linear regression to fit a straight line through actual county yields from 1972 to 2017. The straight line then was extended to give the 2018 trend yield which represents the expected yield given approximately average growing conditions. A yield deviation then equals the actual yield minus the trend yield. A yield deviation of 20 bushels per acre means the actual 2018 yield is 20 bushels higher than the trend yield, an indicator of a very good yield. Conversely, a –20 yield deviation indicates that the county yield is 20 bushels below the trend yield, an indicator of poor growing conditions.

As would be expected, eastern Iowa and central Illinois had yields with positive yield deviations, with many counties having yield trends above 30 bushels per acre (see Figure 2). Note that yield deviations paint a broader area of excellent yields. That area includes southern Illinois, central and southern Indiana, western Ohio, western Kentucky, and parts of central Tennessee.



Other areas did not fare as well. Counties along the Iowa-Minnesota border had below-trend yields (see Figure 2). Other regions of poor yields in include Colorado, eastern Kansas and western Missouri, Texas, Arkansas and Louisiana, North Carolina, and New York.
Soybeans Yields Similar to corn, soybeans almost had a record-breaking yield. The average U.S. soybean yield for 2018 was 51.6 bushels per acre, .3 bushels below the record yield set in 2016 of 51.9 bushels per acre.

There were many areas of exceptional soybean yields (see Figure 3). Twenty-nine counties had average county yields over 70 bushels per acre. Three of these counties were in Nebraska: Gosper (75.2 bushels per acre), Dawson (73.2), and Buffalo (70.6). The remaining 26 counties were in Illinois. Three Illinois counties had average county yields over 80 bushels per acre: Sangamon County (82.3 bushels per acre), Morgan (81.6), and Douglas (80).



Yield deviations suggest that central and southern Illinois had exceptional growing conditions in 2018 (see Figure 4). Excellent growing conditions continued into Indiana, Ohio, Kentucky, and Tennessee. Other areas did not have as productive of a year. Yields were below trend along the Iowa-Minnesota board, North and South Dakota, Nebraska, Wisconsin, Michigan, Pennsylvania, and in North and South Dakota.



Commentary The U.S. had near-record yields for corn and soybeans in 2018. Above-trend yields in central and southern Illinois, central and southern Indiana, western Ohio, Kentucky, and Tennessee where large contributors to the near-record U.S. yields.

The examination of county yields suggests two warnings. Illinois farmers should note that many several areas in the country had below-trend yields in 2018. Therefore, the 2018 experience indicates that below-trend yields are still possible. Illinois farmers should not plan on having above-trend yields in every year. It is entirely possible that the area of below-trend yields centered along the Iowa-Minnesota border in 2018 could occur in central Illinois. At the same time, Iowa and Minnesota could have above-trend yields. If that reversal occurs in 2019, there would be large, negative incomes on many Illinois farms.

Somewhat counter to the first warning, the second warning is for the possibility of much larger national corn and soybean supplies. It is possible that all areas of the U.S. have above-trend yields. That is, the western Corn Belt could have had above-trend yields at the same time the eastern Corn Belt has above-trend yields. If this occurs, national yields would be record-breaking, resulting in falling corn and soybean prices, leading to very low farm incomes.