The News & What it Means – Tenuous Link Between Condition Ratings and Yields

By John DePutter & Dave Milne – June 1, 2018

 

The news:

“In its first estimate of the condition of this year’s crop, the USDA on Tuesday pegged the nationwide crop at 79% good to excellent as of Sunday.”

– Syngenta website article, May 29, 2018

 

What it means:

While encouraging for yields, a strong initial condition rating doesn’t guarantee much of anything.

 

As most probably already know, the USDA’s first condition rating of the season for the 2018 American corn crop pegged it at 79% good to excellent, well above pre-report guesses of 72% and 14 points above a year earlier. It was also the highest opening crop condition rating for US corn since 1994 and the second highest since 1991.

 

So, where did yields in those years ultimately end up?

 

In 1991, when the first condition rating of the season put corn at 81% good to excellent, the final average nationwide yield shook out at just 108.6 bu/acre. Of course, that was a different time, when crop genetics and management practices weren’t nearly as good as they are now. But it is telling that the 1991 yield was almost a full 10 bu below the previous year’s 118.5 bu average. It’s also notable that in 1992 – when the first condition rating of the season was lower – the average US corn yield rebounded sharply to 131.5 bu/acre.

 

In 1994, the experience was admittedly different. In that year, the average national corn yield came in at 138.6 bu/acre, way up from the flood-related disaster of 100.7 bu a year earlier and a new record high that stood until 2003.

 

It is also useful to point out that in 2004, when the average national corn yield shattered the old record and surged all the way to 160.3 bu, the first crop condition rating of the season was only marginally higher than a year earlier when the average yield ended up at 142.2 bu/acre.

 

Tenuous link between yield, crop conditions

It’s a small sample size, but the numbers certainly suggest the relationship between the first crop condition rating of the season and the final yield is a tenuous one. Indeed, there’s plenty of weather between late May/early June and harvest that can make or break a crop. Just consider the case of 2012, when a warm, dry spring allowed the crop to be planted exceptionally early and get off to a relatively strong start.

 

But the taps turned off and by the end of August, 2012, the condition of the corn crop had fallen all the way to just 22% good to excellent amid one of the worst Corn Belt droughts in memory. In that year, the average yield plunged to just 123.1 bu/acre from 146.8 a year earlier. It was the lowest average yield since 1997.

 

It’s never a good thing to count your chickens before they’re hatched.

 

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