What a difference a decade makes

What’s happened

In 2012, a major drought year for the Midwest, corn yield dropped from the trend line estimate of 165 bushels per acre (bpa) in spring to a final yield of 123.4, down 25.2%. Fast forward 11 years to this year’s crop. The current projected yield is 173 bpa, down from a spring estimate of 181.5, a drop of only 4.7%, despite significant hot and dry conditions. The 2023 crop is the lowest-rated crop since 2012, with crop conditions down for both seasons. At the end of 2012, 25% of the corn crop was rated good to excellent. That compares to this year’s 63% as of two weeks ago. In 2012, 50% was rated poor to very poor. That compares to 18% this season. A question many are asking is why the forecasted decline for this year’s production is not larger, considering dry weather and low crop ratings. Is this due to improved genetics, timely rains, or something else?

It is probably a combination of all three with the “something else” category being good farmers and farming practices on advice from agronomists. There is little doubt, however, that this year’s crop was rescued on several occasions, as timely rains were just enough to keep crops moving along until adequate rainfall accumulated during key growth and maturation periods. Better genetics is recognized. There is little doubt that the corn industry has spent a significant amount of money employing resources for more drought-tolerant plants. For many, the heat and duration of weeks of dry weather had them bracing for the worst. Yet, for many, only moderate rainfalls still produced crops that may be close to record, or in some cases record-high. The real question now is if weather outlooks will have as much impact as they once had. Has the “crying wolf” scenario proven overblown?

Why this is important

Corn is a crop that historically is moisture-sensitive, in need of rain during critical stretches of the growing season. Has genetic evolution moved the plant far enough along to require a revision of moisture needs to produce a large crop? Probably not. What 2023 may tell us is that timely rains are paramount. The idea that one can simply expect strong yield despite dry conditions is naïve. End users should not fall into this way of thinking. Nonetheless, we may question the idea that a crop experiencing moderately dry conditions will lead to a much lower yield.

What can you do?

Farmers generally buy crop insurance to avoid crop disasters. Rarely is purchasing insurance a substitute for good marketing. While insurance is critical for many to survive a poor crop, it is necessary to recognize that insurance is not marketing.

Be aware of U.S. and world supplies. If termed adequate, rallies may have limited potential. The 2023 crop year reiterated that price rallies don’t last very long and when they end, they often do so swiftly. In the end, this year’s price action may tell us that, over the last 10 years, confidence regarding production continues to rise and managed money (large traders) will move on timely rains, improved genetics, and great farmers.

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Editor's Note: If you have any questions on this Perspective, feel free to contact Bryan Doherty at Total Farm Marketing: 800-334-9779.

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About the Author: With the wisdom of 30 years at Total Farm Marketing and a following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of brokerage solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the tools and markets, listens, and communicates with intent and clarity to ensure clients are comfortable with the decisions.