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Better yield no surprise
As the third week of September comes to a close, we're hearing many farmers tell us their corn crops are a little better than they expected. Given all of the challenges this year, many didn't have high hopes, especially as the dry August stressed crops. In the southern half of the Midwest, temperatures soared in the upper 90s or low 100s without much moisture. Pollination was affected as was kernel depth and test weight. Yet, as combines roll, we're hearing many say they are pleasantly surprised.
This should be of no surprise. If you know farmers, and we think we do, it's not unusual to aim low for harvest expectations when their crop is challenged. Most will acknowledge their crop will not be what it could have been this year. In some cases, a long way from average. However, by aiming low on their crop projections, if harvest results are better, they at least feel some sense of producing a better crop. In essence, farmers are generally conservative in their yield estimates and this generally shows up in two areas. The first as just explained and second is when crop potential is really high.
In record crop years it's typical to hear farmers say they were pleasantly surprised with yields. In the end, most farmers knew they had very good crops, it's just a matter of how good. There is no doubt that with better tillage practices and genetics, farmers have experienced big crops when Mother Nature cooperates. In most years when farmers know they have a special crop, their estimates are a little lower than what they are really hoping for. They are careful to keep their confidence level in check. After all, no one wants to predict record yield at 220 and be disappointed at 190. It is better to predict 190 and hopefully get 220. Hey, there's that pleasant surprise!
So what does it mean for this year? For now, as harvest progress picks up and if farmers continue to be pleasantly surprised, it sends a message to end users and speculators that there is no urgency to buy. After all, the crop is better than expected. However, it will be interesting to see how this will play out. How will farmer estimates compare to USDA estimates? As an example, where do the numbers fall for a farmer that typically averages 190 bushel, was thinking 140, and now has 155? Is it lower or higher than current USDA figures? It may take until the final USDA report in January to get all the numbers sorted.
If you have questions or comments please contact Bryan Doherty at 1-800-TOP-FARM ext. 129.