Economist: 62 Percent Chance of Exceeding USDA’s Corn Harvest Prediction

The 2021 corn crop yielded 177 bushels an acre, the highest yield on record, while still coming in below the trendline. David Widmar is an economist with Agricultural Economic insights, and his company put together their 2022 Corn Yield Guide. USDA predicted the 2022 corn yield will be 181 bushels per acre, and Widmar says it’s always tough to predict yields from year to year.

“It’s always a bit challenging for producers or the market, even, to size up what’s normal or what should we even consider as extreme in a given year, and the reason why it’s challenging is one, our thinking is often heavily impacted by the last few years – the recency bias, we call that – but also, yields work their way higher over time. So, with corn, specifically, we can expect about 2.1-2.2 additional bushels in trend yield over time.”

Given the number of recent yields that fell below the trendline, getting to that 181 bushel prediction may be a challenge,

“So, what we have set up for 2022 is a year where we’ve seen a lot of below-trend yields the last few years, and so last year’s yield of 177 was technically the record-largest that we’ve ever observed. But the trend yield going into 2022 is somewhere close to 180, almost 181 bushels per acre. So, it’s going to feel a little bit like how are we possibly going to get to this 180 or 181 number USDA is gonna start with given the upward trajectory of yields over time but also some below trend yields in the last few years?”

At this point on the calendar, Widmar says it’s hard to accurately estimate the range of possibilities for the 2022 corn yield.

“It’s very, very early, and what it’s important to keep in mind is, oftentimes, human nature is to understate the range of possible outcomes, so let me give you an example. 2012 is this banner year for really bad yields, and it was 36 bushels below the trend line. So, if we’re going to think about what the implications are, in today’s terms, it might be closer to a 144-bushel yield in 2022 terms. Why is it higher than it was ten years ago? Well, because of that 2.1-bushel increase over time, those yields of 2012 aren’t quite like they used to.”

Because yields have increased over time, it can be hard to use historical data to make predictions. One other factor to consider is harvest hasn’t greatly exceeded the trendline for quite some time.

“Now, on the other end of the spectrum, we got some really big crops in history. For example, in 94, we had a crop that was almost 18 bushels above the trend line, and in 2004, we had a crop that was about 18 bushels above the trendline. In today’s terms, those are going to be above 195, closer to 200-bushel national yields. Now we’re not predicting that in any way shape or form at this point, but I think it’s important for producers to think about, okay, what’s the range here. And the lower side might be higher than most expected, and the upper side could also be quite a bit higher, given we haven’t seen a really big departure from the trend in the last 15-plus years.”

For 2022, AEI says the trendline yield is 180.3 bushels per acre, slightly below the USDA’s preliminary estimates assuming normal weather conditions. AEI says the 181 bushel prediction is well-above last year’s harvest, but the distribution of historic yields suggests a 62 percent chance of final yields coming in above this starting point.

Again, that’s Dave Widmar of Agricultural Economic Insights.

%d bloggers like this: