FOCUS ON AG
September 14, 2020
SEPTEMBER 11 USDA REPORT LOWERS EXPECTED NATIONAL YIELDS
The September 11 USDA Crop Report lowered the projected U.S. average corn and soybean yields for 2020, as compared to the August National Ag Statistics Service (NASS) yield estimates. The USDA yield estimates were based on U.S. crop conditions as of September 1st; and were the first 2020 yield USDA estimates that included actual field data following the derecho storm that devastated crops in Iowa and adjoining States. Some private analysts are actually estimating even lower corn and soybean yields than USDA, citing the increasing drought conditions in many portions of the Western and Central Corn Belt that intensified in late August and early September.
The September 11 USDA Report projects the 2020 national average corn yield at 178.5 bushels per acre, which is a decrease of 3.3 bushels per acre from the August estimate, but will still be a record U.S. corn yield. At this yield level, the 2020 corn yield would be well above the 2019 national average corn yield of 167.4 bushels per acre, as well as being higher than the 2018 yield of 176.4 bushels per acre and the previous record U.S. average corn yield of 176.6 bushels per acre in 2017.
USDA also reduced total 2020 harvested corn acreage in the U.S. by 500,000 acres, with all of the reduced corn acres coming from Iowa following the crop damage from the August 10 derecho storm. USDA is now estimating total U.S. corn production for 2020 at 14.9 billion bushels, which was a reduction of 378 million bushels from the August estimate, and compares to 13.6 billion bushels in 2019 and 14.4 billion bushels in 2018.
USDA is estimating Minnesota’s 2020 average corn yield at the record level 200 bushels per acre, which was an increase of 3 bushels per acre from the August estimate. The projected 2020 Minnesota corn yield would be well above the 2019 statewide average yield of 173 bushels per acre and the 2018 yield of 182 bushels per acre, as well as the previous statewide record average corn yield of 194 bushels per acre in 2017. Based on the September 11 report, USDA lowered Iowa’s 2020 average corn yield by 11 bushels per acre from the August estimate, mainly due to the derecho storm, with the 2020 yield now estimated at 191 bushel per acre. Iowa’s 2020 corn yield estimate is below the 2019 average yield of 198 bushels per acre, 196 bushels per acre in 2018, and 202 bushel per acre yield in 2017. Iowa’s record average corn yield was 203 bushels per acre in 2016.
The 2020 USDA corn yield estimates for the other major corn producing States are Illinois at 203 bushels per acre, compared to 181 bushels per acre in 2019; Indiana at 186 bushels per acre, compared to 169 bushels per acre in 2019; and Nebraska at 188 bushels per acre, compared to 182 bushels per acre in 2019. South Dakota’s projected 2020 corn yield is 168 bushels per acre, compared to 144 bushels per acre in 2019; North Dakota at 157 bushels per acre, compared to 131 bushels per acre in 2019; and Wisconsin at 182 bushels per acre, compared to 166 bushels per acre in 2019.
The USDA Report on September 11 estimated total 2020 U.S. soybean production at just over 4.31 billion bushels, which would be a 20 percent reduction from the 2019 soybean production of 3.55 billion bushels. USDA lowered the projected the 2020 U.S. average soybean yield by 1.4 bushels per acre to 51.9 bushels per acre, compared to 53.3 bushels per acre in August. The 2020 NASS soybean yield estimate compares to 47.4 bushels per acre in 2019, 51.6 bushels per acre in 2018, 49.1 bushels per acre in 2017, and the record national average soybean yield of 52 bushels per acre in 2016. The USDA 2020 soybean yield projection is slightly above the yield estimates by grain trading analysts.
USDA is estimating Minnesota’s 2020 average soybean yield at 52 bushels per acre, which was increased by 1 bushel per acre from the August estimate. The 2020 yield compares to recent statewide yields of 44 bushels per acre in 2019, 50.5 bushels per acre in 2018, 47 bushels per acre in 2017 and the record State soybean yield of 52.5 bushels per acre in 2016. The estimated 2020 soybean yield for Iowa was lowered by 4 bushels per acre from the August estimate, and is now projected at 54 bushels per acre. The 2020 statewide yield compares to 55 bushels per acre in 2019, 57 bushels per acre in 2018, 56.5 bushels per acre in 2017 and the State record of 60.5 bushels per acre in 2016.
Other projected 2020 yields in major soybean producing States include Illinois at 62 bushels per acre, compared to 54 bushels per acre in 2019; Indiana at 60 bushels per acre, compared to 51 bushels per acre in 2019; and Nebraska at 60 bushels per acre, compared to 58.5 bushels per acre in 2019. The estimated 2020 soybean yield for South Dakota is 48 bushels per acre, compared to 42.5 bushels per acre in 2019; with North Dakota at 36 bushels per acre, compared to 31.5 bushels per acre in 2019; and Wisconsin at 54 bushels per acre, compared 47 bushels per acre in 2019. Total 2020 harvested soybean acreage in Minnesota, North and South Dakota is estimated at 18.4 million acres, which is up considerably from 14.6 million acres in 2019.
SEPTEMBER 11 WASDE REPORT
The USDA World Supply and Demand Estimates (WASDE) released on September 11 included the projected decreases in the 2020 U.S. corn yield and the total corn production. The report also showed slight decrease in expected corn usage for ethanol and livestock feed during 2020-21 marketing year, as compared to the August WASDE Report; however, the projected 2020-21 corn usage in both categories is still above 2019-20 levels. U.S. corn export levels for 2020-21 are expected to rise by over 31 percent as compared to 2019-20 export levels, increasing to 2.325 billion bushels of corn.
Total corn usage for 2020-21 are now estimated at 14.675 billion bushels and corn ending stocks are projected at just over 2.5 billion bushels, which is an increase from slightly over 2.2 billion bushels in both 2019-20 and 2018-19. Interestingly, the 2020-21 corn ending stocks were projected at over 3 billion bushels by many marketing analysts just 2-3 months ago. The 2019-20 corn stocks-to-use ratio is now estimated at 17 percent, which would be fairly close to recent years.
USDA is projecting the average on-farm corn price for the 2020-21 marketing year, which runs from September 1, 2020, through August 31, 2021, to be $3.50 per bushel, which is an increase of $.40 per bushel from the August price estimate. The 2019-20 national average corn price, which will be finalized on September 30, 2020, is estimated at $3.60 per bushel, which compares to national average prices of $3.61 per bushel for 2018-19, and 3.36 per bushel for both 2017-18 and 2016-17.
The recent WASDE report projected 2020-21 soybean ending stocks at 460 million bushels, which is a decline of 150 million bushels from the August estimate. The 2020-21 soybean ending stocks would compare to the estimated 2019-20 ending stocks of 595 billion bushels and the 2018-19 ending stocks of 909 million bushels. Soybean exports for 2020-21 are projected to increase to 2.125 billion bushels, compared to 1.68 billion bushels in 2019-20.
USDA is now projecting the average on-farm soybean price for the 2020-21 marketing year at $9.25 per bushel, which is an increase of $.90 per bushel from August price estimate. The 2019-20 estimated final national average soybean price is $8.55 per bushel, which compares to national average prices of $8.55 per bushel for 2019-20, $8.48 per bushel in 2018-19, and $9.33 in 2017-18.
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Note — For additional information contact Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960); E-mail — kent.thiesse@minnstarbank.com) Web Site — http://www.minnstarbank.com/