Understanding US Crop Production
Understanding total US crop production is important for creating opportunities in grain futures trading. The agriculture futures market varies based on perceptions of grain supply and demand. Having access to daily updated, weather-driven crop supply forecasts, such as those provided by CropProphet, that are materially ahead of market perceptions creates opportunities for profitable futures trades and improved risk management.
Total grain production in any year is equal to the number of acres harvested multiplied by the crop’s average yield. This is stated in equation form as:
This equation, along with the key equation for grain yield modeling, forms the mathematical backbone of CropProphet.
Crop Production: Planted vs. Harvested Acres
Crop production variations from year to year across any region are caused by variations in harvested acres, the average yield, or both. Variations in year-to-year crop yield are caused by the weather conditions during the crop season.
The agriculture futures market closely tracks the number of planted acres early each crop season and the number of harvested acres by the end of the crop season. Both harvested and planted acres are important because the USDA NASS publishes both statistics at the end of each season.
The USDA end-of-season estimated yield is based on harvested acres (see table below). However, the end-of-season production estimate is relative to yield per planted acres, making that an important statistic to track as well.
Weather events, such as droughts, usually are a factor that contributes to the difference between planted and harvested acres in any year during the crop season. The August 2020 Iowa derecho event is a great example of severe weather risk impacting the number of harvested corn acres.
CropProphet provides corn, soybean, and winter wheat production and yield forecasts. This is possible because crop season weather conditions are the primary cause of year-to-year variations in yield.
US Crop Production: Tracking the Data
The US Department of Agriculture National Agriculture Statistics Service releases a wealth of agricultural statistics each year. The history of this data is used by CropProphet to create it’s daily, updated weather-based crop yield and production forecasts. The table provides access to blog posts documenting the annual ranks by year for state corn, soybean, winter wheat production, yield, and planted and harvested acres.
State Production, Yield Per Acre, Planted, and Harvested Acre Rankings by State
|Data Type||Corn||Soybean||Winter Wheat|
|Yield||Yield per Acre||Yield per Acre||Yield per Acre|
|Planted Acres||Planted Acres||Planted Acres||Planted Acres|
|Harvested Acres||Harvested Acres||Harvested Acres||Harvested Acres|
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