Tuesday, July 31, 2012

Weekly Outlook - Anticipating the Size of the 2012 Corn and Soybean Crops

The National Agricultural Statistics Service (NASS) of the USDA will release the first yield and production forecasts for the 2012 U.S. corn and soybean crops on August 10. The first forecasts of the season are always highly anticipated, but none more than this year as widespread drought conditions have resulted in a wide range of yield and production expectations.

It might be useful to briefly review the NASS methodology for making corn and soybean yield and production forecasts. Data for the forecasts are collected in two separate surveys conducted roughly in the last week of July and the first week of August for the August report. The Agricultural Yield Survey (AYS) queries farm operators in 32 states for corn and 29 states for soybeans asking operators to identify the number of acres to be harvested and to forecast the final average yield. The sample of operators is based on a sophisticated sample design to achieve the desired sample size and each state is expected to achieve a minimum response rate of 80 percent. In 2011, approximately 27,000 operators were surveyed for all crops for the August report. Each operator is surveyed in subsequent months to obtain new forecasts of acreage and yield. Historical relationships indicate that respondents tend to be conservative in early forecasts of final yields (underestimate yield potential), particularly in drought years. This tendency is quantified and factored into official yield forecasts.  <Read More>

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