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Frequent Contributor

Record corn yields just more FAKE NEWS

Going back to 1955 corn yields have increased an average of 1.9 bushels per acre every year. Its called trend line yield. Final 2017 US corn yield was estimated at 176.6 bushels per acre. 176.6+1.9 = 178.5 what do you know a new record yield 2018. Now lets look at the USDA SWAG projections. In the last 20 years they have been within one bushel per acre in their October projection twice. That is 10% of the time and they have been off by 15% twice also 10% of the time. Given those two facts the USDA estimate is just as likely to be off by 15% as to be on the money. On average the USDA is off by 3.5% this year that's 6.3 bushels + or -. 

So we could just go with the trend yield of 178.5 for 2018 something that we all knew years ago or the USDA estimate of someplace between 174 and 186 most likely yield.

Trend line yield is not news or any great record breaking event.  News happens when yields fall well below trend line as in 2012.  A one year event caused by drought over a large portion of the corn growing states. It resulted in huge market disruption and price increases that the farming sector is still trying to sort out.

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Veteran Advisor

Understanding Yield Projections

The initial USDA projections are based on simple math.  As the season progresses, new information is available that we should all use to modify our own estimate of yields and thus markets.  Too many people take an initial projection as a prediction; they're sure to be disappointed, and of course, are delighted that USDA was "off again".

It's like starting on a cross-country trip and figuring it will take 24 hours of driving time.  Well, low-and behold the new bypass was put in, traffic is light, the kids aren't fighting, mom is happy and you're there 2 hours early.  That's compared with last year when you ran into snow, there were accidents, mom had to stop every hour and you got there two hours later than you'd counted on and low-and-behold, they motel had let out your room.  Did you stop to call them and let them know you'd be late?  No?  Well, one can be happy to be unhappy.  Farming is like that.

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