The USDA’s January Crop Production report represents the government’s final yield, harvested acres and production figures for corn and soybeans. Given the delayed corn harvest this year, the USDA stated in the January Crop Production report that they will be “recontacting” corn producers in North and South Dakota, Wisconsin, Minnesota and Michigan to help develop a more comprehensive final assessment of 2019/20 corn production. After talking with the head corn analyst at USDA-NASS, FBN has a working understanding of how the government will proceed with their resurvey along with an idea about when the data will enter the market—and how this can impact the U.S. farmer.
During the first two weeks of December, USDA’s National Agricultural Statistics Service (NASS) conducts their annual December Agricultural Survey (DAS). This survey uses a sample size of approximately 79,000 farm operators across the U.S. During the time that the DAS was being conducted, a material amount of corn acres was unharvested in North and South Dakota, Wisconsin, Minnesota and Michigan. To help derive final yield, harvested acres and production figures for the 2019/20 crop year, NASS determined that recontacting farmers whose crop was unharvested is necessary.
The USDA will be contacting corn producers who indicated that harvest was incomplete when responding to the DAS survey. Because the harvest pace in North Dakota was historically slow, the government alluded to the notion that a majority of its resources will be focused there.
NASS will recontact producers starting in mid-March.
Using data from the USDA’s final weekly Crop Progress report on December 9, the U.S. had harvested 92 percent of the national corn crop, which was the fourth slowest harvest on record. At just 43 percent complete, the corn harvest pace in North Dakota was the slowest on record. The harvest pace in Michigan (74 percent complete) was third slowest on record, while the harvest pace in South Dakota and Wisconsin were the seventh slowest on record. At 94 percent complete, the pace in Minnesota was the fourth slowest on record.
For the 2019/20 crop year, North Dakota and Wisconsin are estimated to produce 3% of the total U.S. corn crop; Michigan, 2%; and South Dakota, 4%. Meanwhile Minnesota produces approximately 9% of the national total.
Because NASS collected harvest data beyond the final Dec. 9 Crop Progress report, it’s difficult to ascertain how many unharvested acres remain and what the yield may be. When comparing the change in the USDA’s harvested acres figure in the November Crop Production report to the January report we estimated that unharvested acres in North and South Dakota, Minnesota, Michigan and Wisconsin totals approximately 430,000 acres, or less than 0.5% of the USDA’s estimated 81.5 million harvested acres.
In an attempt to present the public with the best possible data, NASS asked producers in the DAS to estimate yields and acres for unharvested areas that were intended for harvest. Therefore, the data in the January Crop Production report for the states mentioned above is regarded as the government’s best estimate based on the survey responses. FBN considers this data to be a temporary placeholder.
No. NASS is the statistical arm of the USDA; they have their own survey methods and use their own statistical methods to produce estimates that are unique to the USDA. The FSA uses their own sampling and survey techniques. The USDA does not collaborate with FSA for final harvested acres and yield data.
The government is aiming to publish any revisions in the May 2020 Crop Production report.
While the USDA attempts to deliver final production information for the 2019/20 corn crop, the local and regional cash markets have responded accordingly. Using the above chart, we believe that the cash market appreciation in Michigan and Wisconsin is a result of tighter supplies amid an enhanced demand structure. We believe that the soft basis in North Dakota and north central areas in South Dakota is attributed to a slow Asian export program, which may be negatively influenced in part by lower quality corn with high test weights.
FBN believes that because the volume of unharvested corn resides outside of the key producing states, any changes to yield and final production figures may not possess enough statistical power to “move the needle” on the aggregate U.S. balance sheet. If the USDA’s results do not possess the ability to materially lower the existing 1.892 billion bushel ending stocks, then we believe that the potential impact on futures prices can be minimal.
This article is excerpted from our Market Intelligence newsletter, delivered weekly toFBN Market Advisory members. With FBN Market Advisory, you'll receive truly personalized tools and reports that go the extra mile. Get access to market news, straightforward marketing recommendations, basis trend insights and weather reports—all relevant to your operation and geographic location.
Copyright © 2020 FBN BR LLC. All rights Reserved. FBN Market Intelligence is distributed by FBN BR LLC. Contact877-472-4607for more information. For the purposes of quality assurance and compliance, phone calls to and from FBN BR LLC may be recorded.
We do not guarantee customers will receive specific benefits or value from participating in FBN BR LLC; results will vary. The data in this article is being supplied as a courtesy by FBN BR LLC. The risk of trading futures and options can be substantial and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This article contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by FBN BR LLC. Past performance is not necessarily indicative of future results.
Disclaimer: Futures and Option trading involves substantial risk, and may not be suitable for everyone. Trading should only be done with true risk capital. Past performance, either actual or hypothetical, is not necessarily indicative of future results.