USDA began reporting winter wheat condition ratings this week and so far the condition of the 2012 crop is well below average. Using our normal calculation the condition ratings index for the 2012 crop is 231 as of this point in the season. Most years USDA does not start reporting condition ratings until the beginning of November so a strict same week every year comparison is not possible. However, we have calculated the index for the first reports of the year back to 1987 and compared these initial 2012 ratings to other years.
It is not a surprise that the ratings this year are below average. Some of the drought hit areas got some precipitation a few weeks ago which should help the crop get started, but soils are still parched and it will take a lot more rain to replenish soil moisture. At the start of the season the 2012 index of 231 is slightly below year-ago levels, and last year the crop got off to a poor start too. The 2012 index is the lowest beginning ratings since 2001 (for the 2002 crop). In fact, the rating for the 2012 crop is the third lowest initial rating in the 26 years considered. The average ratings index for the crops in the fall is calculated at 260, far above the level this year.
The poorest ratings are in the hard-hit drought areas, especially in Texas and Oklahoma. Half of the Texas crop is rated poor or very poor and 21 percent of the Oklahoma crop is in these two categories. The initial condition ratings are not very highly correlated with final yields. The wheat plant can make an amazing recovery following a poor start if weather conditions are favorable.
However, getting a good stand in the fall is critical. If the seed doesn’t germinate in the fall or if the stand is too thin, even good weather can’t rescue the crop. With most weather forecasters predicting that the drought in the South will continue, the chances of trend yields or higher have to be relatively low.
Winter wheat yields are very erratic ranging from a high of 43.2 bushels per acre back in 1998 to a low of 28.2 in 2002. Interestingly, we haven’t seen a record high in winter wheat yields in more than a decade. With the extreme variability in winter wheat yields, there is no good upward trend as there is for some other crops. However, using data for the 1993 through 2011 crops – excluding the years where the actual falls well outside of the overall trend, the “trend” yield for 2012 comes in at 39.1 bushels per acre. The annual increase in the trend is less than 0.2 bushels per year. If we include the initial condition rating index in the calculation for 2012, the yield comes in about 1 bushel per acre below trend. Often times the effects of poor yields show up as a big drop in area harvested as was the case this year when the ratio of harvested to planted acres fell to 0.84, compared to a more normal level of about 0.88. That difference totals up to more than 2 million acres in 2011, which would have added about 100 million bushels to production.