By Jon Scheve, Superior Feed Ingredients, LLC
The market is trying to determine what the upcoming harvest yields will be. Early reports where harvest has started south of I-80 are positive. Generally, areas that received ample precipitation are experiencing better than average yields. However, there were also many pockets of dry weather too, so overall yields are unclear right now. In Illinois specifically, expected yields are varying more than previously estimated.
Still, more dry weather was experienced north of I-80 and west of I-35 where harvest won’t start for another week. Therefore, average yield estimates will remain largely uncertain a little longer.
Asking the right questions when discussing early yield results
As harvest begins to ramp up, early progress reports begin to spring up on social media and local talk among farmers at elevators or coffee shops can run rampant. I also receive many secondhand reports of corn and bean yields throughout the Midwest. While everyone wants to get some early insight into realistic expected yields, I find most statements on yield in these situations provide limited context to be helpful.
Reports that don’t include trendline yields of the area or field are not very useful. Even when comparisons to last year’s crop are provided it can still be somewhat meaningless to someone who does not farm in that area. For example, a central Nebraska farmer who irrigates may be disappointed if yields are under 250 bushels per acre (bpa). However, a North Dakota farmer may be pleased with yields around 125 bpa given how dry it was this year. In Ohio, average yields can fluctuate 40 bpa in 40 miles.
All the field matters
Farmers often share early results of the best area of their top-performing field. While having the yield monitor jump up is great and fun to watch, the yields of the entire field are more important because every acre contributes to the farm’s overall average.
Final estimates should also include shrink
Shrink occasionally is not discussed in preliminary numbers either. Yields at 25% moisture are very different than the actual yield after shrink to 15% is considered. On a field with 250 bpa that would mean 25 bpa less production, which could mean a significant yield average shift for one farm.
Did yields meet expectations?
I always like to know if the field yield met the expectation the farmer had for it from early August. If the expectation was not met, I like to find out why. Was there green snap, nitrogen leach, dry weather, hail, or some other reason? Was the situation isolated to just that farm, or were other area farms affected too?
Knowing and understanding more field detail and what a producer was expecting from it gives a much more accurate account of what the final yield should look like at the end of harvest. Asking the questions “How did your yields compared to normal?” and “Did the yields meet your expectations from early August?” can help put things in perspective for everyone. Still, even with all of these questions, early results can only provide so much information. While it’s easy to get caught up in the early results talk, I find it’s generally better to just be patient and wait for more informed harvest results in late September and early October to have a better feel of national yield direction.
Please email firstname.lastname@example.org with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.
Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results.