Crop condition ratings have turned down

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click image to zoom It is still early in the growing season, even though crop development is well ahead of the “normal” pace. But dry weather is clearly causing concerns in the market. Crop condition ratings started out pretty high but they turned down last week and may decline further this week. Weather forecasters are saying that it will stay relatively dry in most key growing areas over the next couple of weeks.

For several years we have calculated a crop condition ratings index based on the USDA categories in the weekly Crop Progress report. We use this index to compare condition ratings from week to week, from year to year and current conditions to the long term average. The index is constructed by the following formula: Index = (4 * share of crop rated excellent) + (3 * share of crop rated good) + (2* share of crop rated fair) + (1 * share of crop rated poor).

click image to zoom The 10-year average condition rating index for corn for this point in the season is 277. The 2012 condition rating index stood at 281 based on the June 4 Crop Progress report, but the index plunged to 268 this past week.

That is a pretty big week-to-week change, especially for this early in the growing season. The only other time we have seen such a big drop in the index in the last 10 years was in 2007. That year the actual corn yield came in a little above the calculated trend level.

There is not much data for calculating the soybean condition ratings index before mid-June. The second week of June is the first week for which we have data in all ten of the previous years. The 10-year average for this past week is 270. Not only is this year’s 257 pretty far below the average, it is also down 11 points from the previous week. Last year at this time, the soybean condition ratings index stood at 271.

click image to zoom The condition ratings index for cotton also declined significantly last week falling 7 points to 247. At the end of May the cotton condition ratings index came in at 267. Last year the condition ratings index was at only 180 in mid-June, by far the lowest rating in the last decade. But cotton condition ratings are highly variable and ratings were lower than they are now in 2006, 2008 and 2009. Maps show extreme to exceptional drought in most of Georgia, and parts of Alabama and South Carolina.

There is a poor correlation between condition ratings and final crop yields. However, the data can show whether the crops are improving or deteriorating. At this stage of the growing season, crops can still recover and trend or above trend yields are possible. But if the crops continue to deteriorate over the next two or three weeks, the loss in yield potential will be irreversible.

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