An examination of weather and yield data does not provide a definitive indication of whether corn yields will be above or below average this year, but the risk of below-normal yields has to be considered, write two U-Illinois economists.
“For example, in the three previous episodes that most closely resemble the current episode, yield exceeded trend in two years by an average of 4.2 bushels, but was below trend by 23 bushels in one year,” say economists Darrel Good and Scott Irwin at farmdoc daily. “We believe it is prudent to give serious consideration to managing the elevated risk of below-trend corn yields in 2016, despite the current market structure of prices.”
Farmers are expected to plant more corn this year than in 2015 and with normal weather and yields, the corn crop could total 13.725 billion bushels, the third-largest crop on record. With a crop that size, the USDA says the season-average corn price would be the lowest in a decade, $3.45 a bushel, due to the largest corn supply on record. Market prices would rise if the 2016 crop is markedly smaller than expected.