How will an early harvest impact USDA's estimate of 2011 crop?
One of the keys to estimating the potential amount of corn harvested before the start of the new marketing year is to use the estimate by the National Agricultural Statistical service of how much corn was harvested by August 31. That data is not available from all states every year, but NASS does have an estimate of how much corn is mature by August 31.
With all of that data the economists tested it on the 20 crops prior to 2010, to check the performance of their model. Except for several small burps in the 1996 to 2000 crops, the model worked well in estimating feed and residual use for both all feed grains and solely for corn.
With their economic model in hand, which passed their tests, the Economics Research Service staff has estimated 4.717 billion bushels of corn for feed and residual use for the marketing year that is coming to a conclusion at the end of August, which pointed to 12.5% of the corn crop to be mature by the end of August and potentially harvested. That also points to a reduction of 119.4 million bushels of the old crop not being used for feed and residual by the end of the marketing year. However, the economist also calculated that if 25% of the crop is mature this year by August 31, then 4.568 billion bushels of corn will be used for feed and residual use during the marketing year, replacing 149 million bushels of the old crop.
Currently, USDA is using a 4.550 billion bushel feed and residual number in the June WASDE report. It will be interesting to see if the WASDE and NASS statisticians adopt the model developed by the Economic Research Service and integrate the number into the WASDE estimates beginning in July. That report is scheduled for July 11.
The early planting opportunity this year, and the chance for early delivery premiums to farmers harvesting corn early has the potential for significantly changing the estimates of the size of the old and new corn crops. With 2012 crop corn being added to the 2011 crop, it is hard to estimate the size of the corn being fed and for residual allocation. USDA economists developed and tested a model which points to the potential for 4.717 billion bushels going to feed and residual use from the old crop, if 12.5% of the new crop is mature by the end of August.
Source: FarmGate blog