Vs. The Trade

I've obtained some updated trade estimates, so I thought I would update the graphics before the Thursday release by the USDA.

I'm in the center of the trade for corn for yield and production. I'm in the top half for soybeans, both yield and production and this time the trade appears to have jumped to the other side of me in cotton. Remember, the uncorrected model is if we finish the year with current conditions while the corrected model takes into account that conditions more often decline than they do improve. In really good years, however, conditions don't decline. The blue line (corrected model) would continue to rise if conditions are simply stable. Are we in one of those years? It is hard to say.

Week 19

I'm center of the range for corn, both in yields and in production. I must have a slightly higher harvest rate given my production numbers are slightly higher relative to the trade than my yields. For soybeans, again I'm in the range of trade, but in the top half.  For cotton, I don't have much trade information to compare myself to. I was well above the trade and yet spot on last month, but cotton is always tricky. I should note that in some weeks I don't have updates for New Mexico cotton conditions until after I post this, so I use last weeks conditions carried forward. This is small and doesn't effect the total much, but in case somebody out there is following New Mexico (and if so, you should know the average error for this state is probably not small).

For corn and soybeans I'm well withing the trade range so unless there is a big surprise on Thursday, I hope to be close. and as far as I can tell, I'll be closer than 1/2 the folks in 'the trade'. Note on cotton that my yield is a bit higher than USDA but I have a slightly higher abandonment rate. This abandonment rate is calculated based on condition, but yields and abandonment rates don't always move in opposite directions. If the top end of conditions stay the same but at the bottom end, some of the crop moves from poor to very poor, this may increase the abandonment rate as this area does not get harvested, but the remaining harvest crop is then on average in better condition and yields might actually rise. Given these relationships in cotton I tend to focus on the production number more. Abandonment is not nearly as volatile in corn and soybeans so the same problem does not arise here.


If you read back over the archive, the whole purpose is to construct a parsimonious model to predict yields. Something that doesn't take a lot of time and draws out the value of USDA-NASS statistics. I'll do a graphical update on Wednesday if I get new trade estimates and after the report comes out I'll do a comparison table filling in state by state USDA-NASS estimates and comparing them to my own.

Week 19 spreadsheet

Nebraska, a state to watch

I think Nebraska is a state to watch in these estimates. Last year was 178 bu/ac and conditions are better now than they were last year when yields were 178.

Last year 2-5-14-52-27
This year 1-4-11-57-27

I'm only getting 170 bu/ac out of the model. Was last year an unusual year? Have yields in Nebraska accelerated? Are the parameters I estimate for Nebraska showing to little difference between poor to good? (they are within 4 bushels of each other while excellent is ~40 bu/ac higher than that). I think this is one place where I could be badly off. Hopefully I've got other offsetting errors but if they did 178 bu/ac last year, can 180 bu/ac be out of the question this year?

Let me know what you think, post anonymously or send an email. I don't adjust the model in this simple exercise because I don't spend enough time analyzing all the information that is out there. These estimates were an attempt at being parsimonious, and this may be just one instance were some additional examination would lead one to a different conclusion about corn production in Nebraska.

More on state by state numbers, now for Soybeans

The 5 state numbers for soybeans show a similar pattern to corn below. Again Iowa sows the biggest changes so far. Again, I'm not ready to attribute this to greater fluctuations in soybean conditions just yet, it could also be the sensitivity of the parameters. Many analysts who use this data simply create a fixed weight index where Index=1*very poor + 2* poor + 3*fair + 4*good + 5*excellent and do this at a national level. I do each state individually and estimate the weights individually with the only constraint in estimation that they have to be non-decreasing with condition.

I also include a variable on trend and may include a variable on planting progress. It is the parameter on planting progress which got me into so much trouble last year as Illinois had the biggest planting delay in 4 decades but had reasonably cool and moist temperatures the rest of the year which lead to better yields than my simple model would have anticipated. The planting progress is basically an intercept shift. If you want to read more on Illinois crop yields from last year I'd suggest the folks at U of Illinois who do far more detailed models than I do here.

Short note on state by state numbers.

The Iowa yield numbers are significantly higher than those for Illinois but have also show significant variation so far. I don't attribute that to big changes in Iowa as much as I might attribute it to problems with equation parameters. Maybe there is a to big a yield difference between some of the condition categories?

If we lay out the Iowa equation, the Very poor category is the base.
when we go to poor we add +0, so no change in yields, I can't determine any real difference between very poor and poor. The same is true with fair at +0, but good adds +30bu per acre and excellent adds +66 bushels per acre. It could also be there there are just isn't a lot of Iowa that is in very poor or poor condition.

For Illinois we have (again with very poor as the base) poor +0, fair +26, good + 69.1, excellent 69.8 so a much different gradient depending on condition shifts.

Also to add to the discussion , here are the trend yields in corn and soybeans for the top 5 production corn states (in 2007) and also my home state of Missouri. These are the underlying annual trend growth I estimate in the equations. This should be adjusted for conditions and thus starting and ending year are less relevant, but probably not inconsequential.


State-corn trend yield-soybean trend yield

IL - 2.94 bu/ac - 0.47 bu/ac
IA - 2.66 bu/ac - 0.53 bu/ac
IN - 2.32 bu/ac - 0.63 bu/ac
NE - 2.05 bu/ac - 0.74 bu/ac
MN - 2.47 bu/ac - 0.24 bu/ac
MO - 2.21 bu/ac - 0.51 bu/ac

The numbers I show for Iowa would be a little lower than estimated last year and the ones for Illinois might be a bit higher, you can see what I used last year in the archives.

You can click on the table below to enlarge it. It is a state by state reporting of the corrected model production and yield for corn as of this week. I'll update it in next week. Feel free to print it out and pencil in your own guess, how about some anonymous postings on what YOU think the USDA yield will be?

Week 18

Corn and soybeans estimates are converging as we would expect as we approach the end of September where the equations were estimated. So the corrected model shows a modest increase for corn yields while the uncorrected model shows a modest decline. Why? Because although conditions in aggregate may have slipped slightly this week, the decline was less than the historical average during this week and thus the corrected model, which is the best guess, shows a bit of improvement.

Just to clarify, if conditions NEVER changed through the year, the uncorrected line would be a flat line while the corrected model would rise to meet it.

The hot weather in cotton country shows up with a decline in both cotton yields and production. I always hesitate to take one week as a indicator of actual change, so this one will bear watching. If unfavorable temperatures continue, we should see a steady decline here. I'll be posting again on Monday of next week and then again after the USDA report on the 12th to see how close I am to USDA

Week18 Spreadsheet (xls 3mb)

Week17

Corn yield includes the trade estimates for the last few weeks as green dots. I'm in the middle of the trades range. One way to look at is I'm going to be closer than at least half of them.

Last week somebody picked up this blog and reported that last week despite US conditions falling, my results showed and increase in yields. I found this curious so lets take a look.

At the national level, these were the results (comparing July 18 to July 11). So very modest declines, but declines none the less.

-----------------------------------------------------------------------------
State      : Very poor :   Poor    :   Fair    :   Good    : Excellent
-----------------------------------------------------------------------------

18 States .......:     2           7          19          51          21                                                        
Previous week ...:     2           7          18          52          21

The model is a state level model, however, so lets look at the key state breakouts.
First July 11th.

-----------------------------------------------------------------------------
State      : Very poor :   Poor    :   Fair    :   Good    : Excellent
-----------------------------------------------------------------------------
Illinois ........:     3           9          23          47          18
Indiana .........:     3           9          26          46          16
Iowa ............:     3           7          19          51          20
Minnesota .......:     -           3           9          57          31
Missouri ........:     6          16          28          36          14
Nebraska ........:     1           3          10          64          22
Ohio ............:     2           9          25          47          17

Now July 18th.

-----------------------------------------------------------------------------
State      : Very poor :   Poor    :   Fair    :   Good    : Excellent
-----------------------------------------------------------------------------
Illinois ........:     2           8          23          49          18
Indiana .........:     4           9          25          45          17
Iowa ............:     3           8          20          48          21
Minnesota .......:     -           2           8          55          35
Missouri ........:     5          16          31          40           8
Nebraska ........:     1           3          12          63          21
Ohio ............:     2           9          25          48          16

When comparing them by state it is a bit of a mixed bag. The US total condition numbers are weighted by acreage but an extra acre in excellent condition in Iowa probably more than makes up for an acre falling to good condition in most other states. But even in Iowa it is a mixed bag. The difference between fair and good is not the same number of bushels improvement as between good and excellent.

This is true for all states so while the average acre may have seen a very slight decline in the US condition numbers, the state specific changes matter. If this was a single equation national level model, then I might have expected yields to change, but I do each state individually so exactly where conditions change matters.

Week 17 Spreadsheet (3mb)