Sign up to save your podcasts
Or
Share From the Furrow – Lance Honig – August 13, 2024
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
From the Furrow – Lance Honig – August 13, 2024
In our weekly series From the Furrow, host Mike McGinnis and fellow grain geeks shed light on current market conditions and how grain producers can take action to manage their risk.
This week, Mike is joined Lance Honig, Chair of USDA’s Agricultural Statistics Board and Methodology Division Director. Together, they break down the latest Crop Production and Acreage reports. Will FSA acreage data be utilized for future estimates? How did USDA arrive at yields of 250 bushels per acre for Washington and 225 bpa for Illinois? Mike and Lance discuss those topics and a whole lot more.
Questions or comments? Topics you’d like to hear us discuss? Contact us at [email protected].
Show Transcript(Transcript auto-generated)
00;00;00;13 – 00;00;17;04
VOICEOVER
Futures trading involves risk and is not suitable for all investors. Content provided in the segment is not for educational purposes and is not a solicitation to buy or sell commodities. Opinions and statements of guests not affiliated with every egg of their own, and do not reflect the views of the brand. The accuracy of their statements can not be guaranteed by a Barack.
00;00;17;06 – 00;00;40;13
MIKE
Hello and welcome to From the Furrow, brought to you by Ever AG Insights. Each week we talk with subject matter experts on news and topics affecting the grain markets. I’m your host, Mike McGinnis. We get started today with a review of the markets. And today is Tuesday, August 13th. The September corn contract fell five and three quarters cents at 377, while the new crop down four and a half at 397.
00;00;40;13 – 00;01;07;02
MIKE
Soybeans. The September futures down 23.75 on the day at 947. Meanwhile, new crop November down 23.25 at 962. Chicago wheat down 575 at 554. Turning to our guest this week, it’s our privilege to have Lance Hoenig, Agricultural Statistics board chair and director of methodology at USDA. Next, we want to thank Lance for joining us today. Lance, how are you doing?
00;01;07;02 – 00;01;07;11
MIKE
Great.
00;01;07;11 – 00;01;09;19
LANCE
Just recovering from yesterday’s big report.
00;01;09;19 – 00;01;31;03
MIKE
Well, I’m calling it Big Monday. I know that some folks in the sports world, you know, like Big Monday because a lot of sporting events happen. But in the agricultural space, we had a big Monday this week crop production report. The was the data dropped. And also later in the same day the FSA acreage report. And then even later the crop progress report.
00;01;31;03 – 00;01;53;28
MIKE
So a lot going on. NASA is responsible for the crop production estimates. So that’s why we have Lance on the show today. And we want to talk about the crop production report in particular. A lot of surprises here. Lance, let’s start with the corn at 90.74 million acres. That’s down 8/10 of a percent from the previous estimate and down 4% from last year.
00;01;53;29 – 00;01;58;10
MIKE
First off, that I think was a bit of a surprise. Let’s start with that estimate.
00;01;58;10 – 00;02;21;01
LANCE
Sure. And so you kind of alluded to it a little bit in your intro when you talk about the FSA acreage dropping later in the afternoon, the driver behind the acreage change in the crop production report was indeed the FSA acres. Nass has internal access to that information directly from FSA, and so we were able to incorporate a review of that certified acreage data into the process.
00;02;21;01 – 00;02;40;19
LANCE
You know, we’ve done this for years a bit later in the season. And so this was the 1st August that we’ve incorporated that FSA data into those numbers that early. We did do a notice about it, about a week or so, or actually closer to two weeks before the release. But I don’t think folks necessarily caught on that.
00;02;40;19 – 00;03;00;23
LANCE
That was going to happen. Number one. Number two, even if you knew it was coming again, the FSA data dropped an hour later, so nobody really knew for sure what kind of impact that might have. And so yeah, I would agree. I think that was personally, maybe the bigger part of the surprises that came out of the report were on the acreage side.
00;03;00;23 – 00;03;06;15
LANCE
Not so much the yield, even though yields are very good this year. But I think everybody knew they were very good this year.
00;03;06;18 – 00;03;24;25
MIKE
Yeah. The yield estimate at 180 3.1 bushels per acre, up 3.3% from a year ago. That was surprising, I think for a lot of people. I mean, surprising, maybe that it’s that high. I understand what you’re saying, that people were thinking. It’s a good crop out there, both corn and soybean. I don’t think that’s any surprise at all.
00;03;24;25 – 00;03;31;28
MIKE
It’s just I think the, you know, as you look at that yield number for corn and soybeans, both now record large estimates if realized. Right. Both of those.
00;03;32;00 – 00;03;52;15
LANCE
Yeah. That’s right. And you know what I think sometimes gets lost too is the transition that happens from July to August. From a USDA perspective, obviously folks have seen a USDA corn yield forecast for several months now. It’s appeared in the US to report, but August is the first month that Nass forecast corn field and soybean yield and various other crops.
00;03;52;15 – 00;04;17;28
LANCE
And that’s significant because what it really means is the methodology changes. And so this is the first survey based yield. Look for these crops for this current crop season. And so up to this point, what the was he’s been using is largely a, you know, weather impact but trend driven yield forecast. And so now we’re incorporating data from what’s actually happening this season.
00;04;17;29 – 00;04;32;22
LANCE
Finding out from farmers. What do you think your yields are going to be this year. And so that is a shift in how it’s done. And so yes, USDA changed our forecast yesterday. But it’s really a new forecast and in a lot of ways too. Right.
00;04;32;26 – 00;04;48;03
MIKE
Well let’s break down some of the other surprises. I think the ice states Iowa, Illinois, Indiana, those acreage estimates all fell versus previous year. And again, maybe no surprise to some folks, but for all of them to fall at the same time, what are you hearing?
00;04;48;03 – 00;05;10;01
LANCE
Well, from an acreage standpoint, obviously in total, we saw acreage fall, right. In general, we saw about 1.2 or so million acres less than what we would call principal crops. But if you break it down to just corn and soybeans, it really was mostly switching. I mean, corn acreage dropped about 720 some thousand acres, soybean acres, up a million from what we had published at the end of June.
00;05;10;04 – 00;05;32;13
LANCE
When I say a switch, it isn’t that the acre switch, right? We got a better handle on what farmers had actually planted than we had in late June. And so from strictly a corn and soybean perspective on acreage, it was really just about really aligning the acreage between those two crops for the most part, and the largest changes, not necessarily in the States in particular, but certainly in the Corn Belt.
00;05;32;13 – 00;05;32;26
LANCE
Right.
00;05;32;26 – 00;05;46;08
MIKE
As we take a look at the state by state yields, I had to laugh. And I even asked my coworker to check this. But the state of Washington has the largest yield at 250 bushels per acre. What’s going on there? I wouldn’t have guessed that.
00;05;46;09 – 00;06;00;23
LANCE
Well, you know, we tend to see high yields on crops in general up in the northwest. You know, there’s a reason it’s always gloomy up there, right? There’s there’s a lot of moisture and it’s a big crop. You know, I think back to many, many years ago when I was working on objective yield in Kansas, that’s where I grew up.
00;06;00;26 – 00;06;20;17
LANCE
And so we would routinely get these samples of wheat into our lab from Kansas and surrounding states, and one from Washington got misdirected. One day. I got to tell you, once you see the difference, you’re not going to be surprised why yields are bigger in states like Washington was. It looked like a different crop. It was huge. Just huge compared to what a Kansas boy was used to.
00;06;20;23 – 00;06;38;00
MIKE
And I imagine there’s subsoil. Moisture is always plentiful, but with all the rain that they do get annually. Illinois, by the way, at 225 bushels per acre, the largest in the Midwest. You know, probably no surprise there for many folks that they usually do fairly well, although that number might be a little higher than normal. Right?
00;06;38;05 – 00;06;55;28
LANCE
Oh, it’s more than a little higher than normal. And, you know, if you look through not just Illinois, Iowa, you know, in the heart of the Corn Belt, they’re not only record yields, but I mean, we really more than broke record yields, right? We’re shattering record yields in many cases. And so I think from that perspective it probably is a surprise.
00;06;55;28 – 00;07;15;04
LANCE
I have heard 1 or 2 folks in particular mention Illinois just because of the magnitude of the number that we’re talking about there. But I’ve looked at some satellite imagery through there as well. And oh my goodness, I got to tell you, things really pop off the screen specifically in Illinois. That is the garden spot this year among a very good crop in general.
00;07;15;07 – 00;07;29;08
MIKE
Let’s switch to soybeans. The acreage number was 87.1. That’s up. Harvested acreage was 86.2 million. That’s up. And the yield 53.2. That’s up as well. So start with the acreage there and work down the line. Plenty to talk about there in that category.
00;07;29;13 – 00;07;54;09
LANCE
Yeah. Same story on the acreage. You know as I talked about it was really we saw most of that acres come at the expense of corn. Right. Yeah. Just a realignment of what we measured. I don’t think it’s a shift in what happened. It’s just we have a better handle. FSA certified acreage data. You can’t beat that. And by the way, the reason we’ve moved these acreage estimates up earlier in the season is because the FSA is getting that data in and compiled much quicker than they used to.
00;07;54;09 – 00;08;16;07
LANCE
Hats off to them. They’re doing a phenomenal job, and that allows us to get production closer sooner. So we really appreciate that. I harvested area for soybeans in particular. You know, we hardly abandoned any soybeans. We’re just following the plan at acreage increase up there. But yields, much like we talked about with it’s just phenomenal out there. And we saw that maybe not exactly the same patterns but pretty darn close.
00;08;16;07 – 00;08;27;01
LANCE
It’s a great crop out there. And when we look at soybeans we’re actually talking about record high production as well. And so it’s just a massive soybean crop that’s coming out there this season, much like we talked about corn.
00;08;27;02 – 00;08;47;06
MIKE
Illinois with the 66 yield bushel per acre yield at the top, it looks like. And Iowa 61. So no real big outliers. But again the numbers are large. And I did hear somebody say, you know, all the deep dive data that they’ve done, they still realize that it’s going to take a pretty good year to meet some of these numbers.
00;08;47;06 – 00;09;06;24
MIKE
We’ll have to see if that actually happens. But the forecast to end the month of August looks favorable, and the harvest weather looks favorable. So things don’t look too surprising there. I know that, Lance, you had a webinar or maybe some chat on social media. Can you give us a feel for what people have been saying to you since the Monday drop of the report?
00;09;06;26 – 00;09;29;23
LANCE
To be honest with you, it’s been much quieter than I expected. And so what that tells me again, is that folks know it’s a big crop. Yeah, there’s like I say in particular, some of the numbers, especially state by state. That’s where it becomes a little bit, I guess, alarming in some cases. Right. When you look at you mentioned Illinois, that’s probably the one I’ve heard the most specific comments about, just because it’s such a massive number.
00;09;29;25 – 00;09;50;07
LANCE
But generally speaking, it’s been pretty quiet. You know, we get a few comments here and there. And obviously one of the things we look at around release time is what we’re folks expecting versus what we’re publishing. And we definitely saw that. It was a surprise. But as I mentioned earlier, most of the surprise seemed to be more around the acres than the yield.
00;09;50;08 – 00;10;07;05
LANCE
And so it’ll be interesting to see as the next couple of days unfold, as people digest it a little bit more and maybe get a little bit more comfortable sharing and asking some questions. I’m going to be traveling a little bit later this week, so I’ll have an opportunity to hear from some folks across Midwest first hand, but up to now, quieter than I thought.
00;10;07;05 – 00;10;23;11
MIKE
Now let’s talk about the FSA acreage data. You did mention that you’re pulling it forward. You’re including it in some earlier reports going forward. Now for the September report, what will be the methodology there and how do you include FSA data in any further out reports going forward?
00;10;23;15 – 00;10;44;09
LANCE
Yeah. So from an acreage standpoint, we will be reviewing the FSA acres again for the September report because August is earlier than we’ve ever done before. When we set this up for this season, we said, you know, we’re going to move ahead to August, but we’re going to go ahead and keep an open period in September just to make sure that things are going to work the way we think they’re going to work.
00;10;44;09 – 00;11;02;16
LANCE
So we will take a look at that. Although I’m going to be honest, you know, we’re anticipating that that’s going to be pretty smooth or, you know, maybe some minor adjustments if needed. If everything goes the way we think it’s going up. But the opportunities there in case we get more acres certified than we’re anticipating, we’re watching it week by week leading up to that.
00;11;02;16 – 00;11;21;28
LANCE
So we’ve got that piece. And then from a yield standpoint, in September, we actually not only repeat our farmer based survey to measure yield, we will also begin field work. We call it our objective yield survey for the corn and soybeans. We have already been doing that for winter wheat. You saw that in the report yesterday. But we’re doing that for corn and soybeans.
00;11;21;29 – 00;11;45;13
LANCE
That means in addition to asking farmers what they expect their yields to be, we’re going to actually be sending our trained enumerators into sample fields. So we actually sample fields across the key growing area ten states for corn, 11 for soybeans, roughly 1500 samples apiece. Each of those sample fields gets two units laid out in those fields. The enumerators go into those samples month after month.
00;11;45;15 – 00;12;08;27
LANCE
Track them. They’re counting. They’re measuring. As the crop matures, they’re actually harvesting portions of those plots. We’ve got a lab in Saint Louis where we can send what gets harvested, so we can evaluate those yields from a bit more of an objective. That’s why we called the objective yield survey, right. Because it’s a bit more of active and not necessarily quite as subjective as what we might be getting from farmers.
00;12;08;27 – 00;12;20;10
LANCE
And so we’re going to have that extra piece of data feeding in. And we’ll look at the satellite imagery again too. So we’ve really got three major pieces of information that are going to be flowing into the yield forecasts in the September Crop Production report.
00;12;20;10 – 00;12;23;17
MIKE
So FSA will update again in September.
00;12;23;17 – 00;12;45;01
LANCE
Their acreage estimate they will post a new file in September. They do a month after month all the way up until early January when they will make the last posting. But that data changes every hour, right? And so as I mentioned earlier, we’ve got access to that. So we’re actually tracking it every week. Tuesdays are a day. And so right before I got on here to record this I was taken a peek.
00;12;45;01 – 00;12;56;12
LANCE
Right. Because I’m as eager to find out what’s happening as anybody is. And so you’re just going to have to wait until September. That’s just a teaser, right? Not a sneak preview. That’s a teaser for you. So we’re watching pretty closely.
00;12;56;17 – 00;13;11;18
MIKE
Real quick on test. Wait, what’s your feeling about test week this year and how it might play into the size? We have high yields obviously coming up high acreage, but in a year where there’s been, you know, favorable weather in general for the growing season, what about test week.
00;13;11;18 – 00;13;27;24
LANCE
Well test week comes up periodically and we’ll really get our first look at what that could look like next month when we start to get those objective yield samples coming in. That’s one of the things we’re able to kind of look at by doing objective yield, right? I mentioned we we can harvest portions and send them to our lab and get a look at that.
00;13;27;24 – 00;13;48;13
LANCE
The real challenge around year’s when there are test weight issues. And again, I don’t know if this is one of those years or not. I’m certainly not suggesting that. But the issue that we run into, if there is, is it’s hard to recognize is that. And so the information you’re getting from producers saying what they think their yields might be, it might be hard for them to know how to incorporate that into their.
00;13;48;13 – 00;14;06;09
LANCE
And so sometimes when there’s test weight issues it can be a little bit hard to get as good a handle on what those yields are, because we tend to think in terms of what we see. Right. And oftentimes what you see isn’t quite what you weigh going across the scales once test weight comes into play. And so it’s a factor.
00;14;06;09 – 00;14;20;27
LANCE
But you know, what we ask producers is, you know, tell us the best you can, what you think your yield is. If we get to a point where they know they have some test weight issues, they’ve got an opportunity to factor that into their recording. But I don’t think we’re there yet. I don’t think anybody really knows for sure.
00;14;20;27 – 00;14;23;28
LANCE
It’s pure speculation at this point. And so time will tell.
00;14;23;28 – 00;14;30;10
MIKE
What else is going on at Nass Lance that you think folks should know, or that they could take away from this conversation that.
00;14;30;10 – 00;14;46;12
LANCE
We’ve been having. Yeah. So, you know, here at Nass, I mean, we’re doing all of this because we want to make sure that everybody in agriculture has access to the most accurate information possible. You know, we’re here to level the playing field. There are lots and lots of people out there who have come up with ideas. And I say, come up with ideas.
00;14;46;12 – 00;15;03;20
LANCE
They’re doing some hard work and, you know, some serious work out there to try and figure out what these crop sizes are. But we’ve got a more resources in general. Right? We’ve got the power of USDA behind us with the work that we’re doing. And then the second thing is we’ve got no vested interest in this other than being as accurate as possible.
00;15;03;20 – 00;15;22;21
LANCE
We are a statistical organization here at USDA. I can promise you there is absolutely zero connection between the numbers that came out yesterday and any kind of political activity that happens, whether it’s, you know, within USDA or anywhere else. And so we’re statisticians, we just want the data to be as good as possible, and we want to make sure everybody has access at once.
00;15;22;21 – 00;15;40;26
LANCE
And if you’re out there doing this privately, God love you. You’re doing great work, but you probably have a different interest than what we have. And our interest is just making sure everybody’s got access. And you see that, right? Because there’s a lot of numbers floating out there and everybody reset. Yesterday we put a number out there. Everybody doesn’t mean they all like it doesn’t mean they all agree with it.
00;15;40;26 – 00;15;47;22
LANCE
But everybody got back on the same level and now they can work off of that until we come out with another number next month.
00;15;47;25 – 00;15;59;02
MIKE
And that’s going to be exciting to watch because as the numbers get big, you know, obviously some people wonder how big, you know, can this get in the following reports and you have a big job ahead of you. As you know.
00;15;59;04 – 00;16;12;21
LANCE
A second month is sometimes bigger than the first. Right? And I don’t mean bigger in terms of numbers, but you know, we’ve got a marker in the sand, right? And so now from here we see where things pivot from there. And so August is a pretty big report. But September is no slouch either.
00;16;12;25 – 00;16;17;20
MIKE
Lance, thanks again for your time and we appreciate your work and we appreciate you joining us here today.
00;16;17;22 – 00;16;19;00
LANCE
All right. I really appreciate it.
00;16;19;01 – 00;16;36;28
MIKE
Lance Holding, Agricultural Statistics Board chair and director of methodology at USDA. Nass want to thank him for his presence. We also want to thank you if you’ve enjoyed listening to From the Furrow, be sure to tell a friend or to and subscribe to us wherever you listen to your podcast. Thank you to the Ever Egg Insights Crew for their work on today’s show.
Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.
EVER.AG INSURANCE SERVICES IS A LICENSED INSURANCE AGENCY AND AN AFFILIATE OF EVER.AG. INFORMATION CONTAINED HEREIN IN THIS WEBSITE IS COMPILED FOR THE CONVENIENCE OF THE USER. INFORMATION IS OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE AND IS FURNISHED WITHOUT RESPONSIBILITY FOR ACCURACY OR CONTENT. MARKET DATA IS SUBJECT TO CHANGE AT ANY TIME. Ever.Ag is a licensed insurance agency in the following states: AZ, CA, CO, CT, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NM, NY, NC, ND, OK, OH, OR, PA, RI, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY.
—
The following music was used for this media project:
Music: Funky Intro 29 by TaigaSoundProd
Free download: https://filmmusic.io/song/9520-funky-intro-29
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://linktr.ee/taigasoundprod
© Ever.Ag 2023, confidential and proprietary.
The post From the Furrow – Lance Honig – August 13, 2024 appeared first on .
View all episodes
By Ever.Ag
5
55 ratings
In our weekly series From the Furrow, host Mike McGinnis and fellow grain geeks shed light on current market conditions and how grain producers can take action to manage their risk.
This week, Mike is joined Lance Honig, Chair of USDA’s Agricultural Statistics Board and Methodology Division Director. Together, they break down the latest Crop Production and Acreage reports. Will FSA acreage data be utilized for future estimates? How did USDA arrive at yields of 250 bushels per acre for Washington and 225 bpa for Illinois? Mike and Lance discuss those topics and a whole lot more.
Questions or comments? Topics you’d like to hear us discuss? Contact us at [email protected].
Show Transcript(Transcript auto-generated)
00;00;00;13 – 00;00;17;04
VOICEOVER
Futures trading involves risk and is not suitable for all investors. Content provided in the segment is not for educational purposes and is not a solicitation to buy or sell commodities. Opinions and statements of guests not affiliated with every egg of their own, and do not reflect the views of the brand. The accuracy of their statements can not be guaranteed by a Barack.
00;00;17;06 – 00;00;40;13
MIKE
Hello and welcome to From the Furrow, brought to you by Ever AG Insights. Each week we talk with subject matter experts on news and topics affecting the grain markets. I’m your host, Mike McGinnis. We get started today with a review of the markets. And today is Tuesday, August 13th. The September corn contract fell five and three quarters cents at 377, while the new crop down four and a half at 397.
00;00;40;13 – 00;01;07;02
MIKE
Soybeans. The September futures down 23.75 on the day at 947. Meanwhile, new crop November down 23.25 at 962. Chicago wheat down 575 at 554. Turning to our guest this week, it’s our privilege to have Lance Hoenig, Agricultural Statistics board chair and director of methodology at USDA. Next, we want to thank Lance for joining us today. Lance, how are you doing?
00;01;07;02 – 00;01;07;11
MIKE
Great.
00;01;07;11 – 00;01;09;19
LANCE
Just recovering from yesterday’s big report.
00;01;09;19 – 00;01;31;03
MIKE
Well, I’m calling it Big Monday. I know that some folks in the sports world, you know, like Big Monday because a lot of sporting events happen. But in the agricultural space, we had a big Monday this week crop production report. The was the data dropped. And also later in the same day the FSA acreage report. And then even later the crop progress report.
00;01;31;03 – 00;01;53;28
MIKE
So a lot going on. NASA is responsible for the crop production estimates. So that’s why we have Lance on the show today. And we want to talk about the crop production report in particular. A lot of surprises here. Lance, let’s start with the corn at 90.74 million acres. That’s down 8/10 of a percent from the previous estimate and down 4% from last year.
00;01;53;29 – 00;01;58;10
MIKE
First off, that I think was a bit of a surprise. Let’s start with that estimate.
00;01;58;10 – 00;02;21;01
LANCE
Sure. And so you kind of alluded to it a little bit in your intro when you talk about the FSA acreage dropping later in the afternoon, the driver behind the acreage change in the crop production report was indeed the FSA acres. Nass has internal access to that information directly from FSA, and so we were able to incorporate a review of that certified acreage data into the process.
00;02;21;01 – 00;02;40;19
LANCE
You know, we’ve done this for years a bit later in the season. And so this was the 1st August that we’ve incorporated that FSA data into those numbers that early. We did do a notice about it, about a week or so, or actually closer to two weeks before the release. But I don’t think folks necessarily caught on that.
00;02;40;19 – 00;03;00;23
LANCE
That was going to happen. Number one. Number two, even if you knew it was coming again, the FSA data dropped an hour later, so nobody really knew for sure what kind of impact that might have. And so yeah, I would agree. I think that was personally, maybe the bigger part of the surprises that came out of the report were on the acreage side.
00;03;00;23 – 00;03;06;15
LANCE
Not so much the yield, even though yields are very good this year. But I think everybody knew they were very good this year.
00;03;06;18 – 00;03;24;25
MIKE
Yeah. The yield estimate at 180 3.1 bushels per acre, up 3.3% from a year ago. That was surprising, I think for a lot of people. I mean, surprising, maybe that it’s that high. I understand what you’re saying, that people were thinking. It’s a good crop out there, both corn and soybean. I don’t think that’s any surprise at all.
00;03;24;25 – 00;03;31;28
MIKE
It’s just I think the, you know, as you look at that yield number for corn and soybeans, both now record large estimates if realized. Right. Both of those.
00;03;32;00 – 00;03;52;15
LANCE
Yeah. That’s right. And you know what I think sometimes gets lost too is the transition that happens from July to August. From a USDA perspective, obviously folks have seen a USDA corn yield forecast for several months now. It’s appeared in the US to report, but August is the first month that Nass forecast corn field and soybean yield and various other crops.
00;03;52;15 – 00;04;17;28
LANCE
And that’s significant because what it really means is the methodology changes. And so this is the first survey based yield. Look for these crops for this current crop season. And so up to this point, what the was he’s been using is largely a, you know, weather impact but trend driven yield forecast. And so now we’re incorporating data from what’s actually happening this season.
00;04;17;29 – 00;04;32;22
LANCE
Finding out from farmers. What do you think your yields are going to be this year. And so that is a shift in how it’s done. And so yes, USDA changed our forecast yesterday. But it’s really a new forecast and in a lot of ways too. Right.
00;04;32;26 – 00;04;48;03
MIKE
Well let’s break down some of the other surprises. I think the ice states Iowa, Illinois, Indiana, those acreage estimates all fell versus previous year. And again, maybe no surprise to some folks, but for all of them to fall at the same time, what are you hearing?
00;04;48;03 – 00;05;10;01
LANCE
Well, from an acreage standpoint, obviously in total, we saw acreage fall, right. In general, we saw about 1.2 or so million acres less than what we would call principal crops. But if you break it down to just corn and soybeans, it really was mostly switching. I mean, corn acreage dropped about 720 some thousand acres, soybean acres, up a million from what we had published at the end of June.
00;05;10;04 – 00;05;32;13
LANCE
When I say a switch, it isn’t that the acre switch, right? We got a better handle on what farmers had actually planted than we had in late June. And so from strictly a corn and soybean perspective on acreage, it was really just about really aligning the acreage between those two crops for the most part, and the largest changes, not necessarily in the States in particular, but certainly in the Corn Belt.
00;05;32;13 – 00;05;32;26
LANCE
Right.
00;05;32;26 – 00;05;46;08
MIKE
As we take a look at the state by state yields, I had to laugh. And I even asked my coworker to check this. But the state of Washington has the largest yield at 250 bushels per acre. What’s going on there? I wouldn’t have guessed that.
00;05;46;09 – 00;06;00;23
LANCE
Well, you know, we tend to see high yields on crops in general up in the northwest. You know, there’s a reason it’s always gloomy up there, right? There’s there’s a lot of moisture and it’s a big crop. You know, I think back to many, many years ago when I was working on objective yield in Kansas, that’s where I grew up.
00;06;00;26 – 00;06;20;17
LANCE
And so we would routinely get these samples of wheat into our lab from Kansas and surrounding states, and one from Washington got misdirected. One day. I got to tell you, once you see the difference, you’re not going to be surprised why yields are bigger in states like Washington was. It looked like a different crop. It was huge. Just huge compared to what a Kansas boy was used to.
00;06;20;23 – 00;06;38;00
MIKE
And I imagine there’s subsoil. Moisture is always plentiful, but with all the rain that they do get annually. Illinois, by the way, at 225 bushels per acre, the largest in the Midwest. You know, probably no surprise there for many folks that they usually do fairly well, although that number might be a little higher than normal. Right?
00;06;38;05 – 00;06;55;28
LANCE
Oh, it’s more than a little higher than normal. And, you know, if you look through not just Illinois, Iowa, you know, in the heart of the Corn Belt, they’re not only record yields, but I mean, we really more than broke record yields, right? We’re shattering record yields in many cases. And so I think from that perspective it probably is a surprise.
00;06;55;28 – 00;07;15;04
LANCE
I have heard 1 or 2 folks in particular mention Illinois just because of the magnitude of the number that we’re talking about there. But I’ve looked at some satellite imagery through there as well. And oh my goodness, I got to tell you, things really pop off the screen specifically in Illinois. That is the garden spot this year among a very good crop in general.
00;07;15;07 – 00;07;29;08
MIKE
Let’s switch to soybeans. The acreage number was 87.1. That’s up. Harvested acreage was 86.2 million. That’s up. And the yield 53.2. That’s up as well. So start with the acreage there and work down the line. Plenty to talk about there in that category.
00;07;29;13 – 00;07;54;09
LANCE
Yeah. Same story on the acreage. You know as I talked about it was really we saw most of that acres come at the expense of corn. Right. Yeah. Just a realignment of what we measured. I don’t think it’s a shift in what happened. It’s just we have a better handle. FSA certified acreage data. You can’t beat that. And by the way, the reason we’ve moved these acreage estimates up earlier in the season is because the FSA is getting that data in and compiled much quicker than they used to.
00;07;54;09 – 00;08;16;07
LANCE
Hats off to them. They’re doing a phenomenal job, and that allows us to get production closer sooner. So we really appreciate that. I harvested area for soybeans in particular. You know, we hardly abandoned any soybeans. We’re just following the plan at acreage increase up there. But yields, much like we talked about with it’s just phenomenal out there. And we saw that maybe not exactly the same patterns but pretty darn close.
00;08;16;07 – 00;08;27;01
LANCE
It’s a great crop out there. And when we look at soybeans we’re actually talking about record high production as well. And so it’s just a massive soybean crop that’s coming out there this season, much like we talked about corn.
00;08;27;02 – 00;08;47;06
MIKE
Illinois with the 66 yield bushel per acre yield at the top, it looks like. And Iowa 61. So no real big outliers. But again the numbers are large. And I did hear somebody say, you know, all the deep dive data that they’ve done, they still realize that it’s going to take a pretty good year to meet some of these numbers.
00;08;47;06 – 00;09;06;24
MIKE
We’ll have to see if that actually happens. But the forecast to end the month of August looks favorable, and the harvest weather looks favorable. So things don’t look too surprising there. I know that, Lance, you had a webinar or maybe some chat on social media. Can you give us a feel for what people have been saying to you since the Monday drop of the report?
00;09;06;26 – 00;09;29;23
LANCE
To be honest with you, it’s been much quieter than I expected. And so what that tells me again, is that folks know it’s a big crop. Yeah, there’s like I say in particular, some of the numbers, especially state by state. That’s where it becomes a little bit, I guess, alarming in some cases. Right. When you look at you mentioned Illinois, that’s probably the one I’ve heard the most specific comments about, just because it’s such a massive number.
00;09;29;25 – 00;09;50;07
LANCE
But generally speaking, it’s been pretty quiet. You know, we get a few comments here and there. And obviously one of the things we look at around release time is what we’re folks expecting versus what we’re publishing. And we definitely saw that. It was a surprise. But as I mentioned earlier, most of the surprise seemed to be more around the acres than the yield.
00;09;50;08 – 00;10;07;05
LANCE
And so it’ll be interesting to see as the next couple of days unfold, as people digest it a little bit more and maybe get a little bit more comfortable sharing and asking some questions. I’m going to be traveling a little bit later this week, so I’ll have an opportunity to hear from some folks across Midwest first hand, but up to now, quieter than I thought.
00;10;07;05 – 00;10;23;11
MIKE
Now let’s talk about the FSA acreage data. You did mention that you’re pulling it forward. You’re including it in some earlier reports going forward. Now for the September report, what will be the methodology there and how do you include FSA data in any further out reports going forward?
00;10;23;15 – 00;10;44;09
LANCE
Yeah. So from an acreage standpoint, we will be reviewing the FSA acres again for the September report because August is earlier than we’ve ever done before. When we set this up for this season, we said, you know, we’re going to move ahead to August, but we’re going to go ahead and keep an open period in September just to make sure that things are going to work the way we think they’re going to work.
00;10;44;09 – 00;11;02;16
LANCE
So we will take a look at that. Although I’m going to be honest, you know, we’re anticipating that that’s going to be pretty smooth or, you know, maybe some minor adjustments if needed. If everything goes the way we think it’s going up. But the opportunities there in case we get more acres certified than we’re anticipating, we’re watching it week by week leading up to that.
00;11;02;16 – 00;11;21;28
LANCE
So we’ve got that piece. And then from a yield standpoint, in September, we actually not only repeat our farmer based survey to measure yield, we will also begin field work. We call it our objective yield survey for the corn and soybeans. We have already been doing that for winter wheat. You saw that in the report yesterday. But we’re doing that for corn and soybeans.
00;11;21;29 – 00;11;45;13
LANCE
That means in addition to asking farmers what they expect their yields to be, we’re going to actually be sending our trained enumerators into sample fields. So we actually sample fields across the key growing area ten states for corn, 11 for soybeans, roughly 1500 samples apiece. Each of those sample fields gets two units laid out in those fields. The enumerators go into those samples month after month.
00;11;45;15 – 00;12;08;27
LANCE
Track them. They’re counting. They’re measuring. As the crop matures, they’re actually harvesting portions of those plots. We’ve got a lab in Saint Louis where we can send what gets harvested, so we can evaluate those yields from a bit more of an objective. That’s why we called the objective yield survey, right. Because it’s a bit more of active and not necessarily quite as subjective as what we might be getting from farmers.
00;12;08;27 – 00;12;20;10
LANCE
And so we’re going to have that extra piece of data feeding in. And we’ll look at the satellite imagery again too. So we’ve really got three major pieces of information that are going to be flowing into the yield forecasts in the September Crop Production report.
00;12;20;10 – 00;12;23;17
MIKE
So FSA will update again in September.
00;12;23;17 – 00;12;45;01
LANCE
Their acreage estimate they will post a new file in September. They do a month after month all the way up until early January when they will make the last posting. But that data changes every hour, right? And so as I mentioned earlier, we’ve got access to that. So we’re actually tracking it every week. Tuesdays are a day. And so right before I got on here to record this I was taken a peek.
00;12;45;01 – 00;12;56;12
LANCE
Right. Because I’m as eager to find out what’s happening as anybody is. And so you’re just going to have to wait until September. That’s just a teaser, right? Not a sneak preview. That’s a teaser for you. So we’re watching pretty closely.
00;12;56;17 – 00;13;11;18
MIKE
Real quick on test. Wait, what’s your feeling about test week this year and how it might play into the size? We have high yields obviously coming up high acreage, but in a year where there’s been, you know, favorable weather in general for the growing season, what about test week.
00;13;11;18 – 00;13;27;24
LANCE
Well test week comes up periodically and we’ll really get our first look at what that could look like next month when we start to get those objective yield samples coming in. That’s one of the things we’re able to kind of look at by doing objective yield, right? I mentioned we we can harvest portions and send them to our lab and get a look at that.
00;13;27;24 – 00;13;48;13
LANCE
The real challenge around year’s when there are test weight issues. And again, I don’t know if this is one of those years or not. I’m certainly not suggesting that. But the issue that we run into, if there is, is it’s hard to recognize is that. And so the information you’re getting from producers saying what they think their yields might be, it might be hard for them to know how to incorporate that into their.
00;13;48;13 – 00;14;06;09
LANCE
And so sometimes when there’s test weight issues it can be a little bit hard to get as good a handle on what those yields are, because we tend to think in terms of what we see. Right. And oftentimes what you see isn’t quite what you weigh going across the scales once test weight comes into play. And so it’s a factor.
00;14;06;09 – 00;14;20;27
LANCE
But you know, what we ask producers is, you know, tell us the best you can, what you think your yield is. If we get to a point where they know they have some test weight issues, they’ve got an opportunity to factor that into their recording. But I don’t think we’re there yet. I don’t think anybody really knows for sure.
00;14;20;27 – 00;14;23;28
LANCE
It’s pure speculation at this point. And so time will tell.
00;14;23;28 – 00;14;30;10
MIKE
What else is going on at Nass Lance that you think folks should know, or that they could take away from this conversation that.
00;14;30;10 – 00;14;46;12
LANCE
We’ve been having. Yeah. So, you know, here at Nass, I mean, we’re doing all of this because we want to make sure that everybody in agriculture has access to the most accurate information possible. You know, we’re here to level the playing field. There are lots and lots of people out there who have come up with ideas. And I say, come up with ideas.
00;14;46;12 – 00;15;03;20
LANCE
They’re doing some hard work and, you know, some serious work out there to try and figure out what these crop sizes are. But we’ve got a more resources in general. Right? We’ve got the power of USDA behind us with the work that we’re doing. And then the second thing is we’ve got no vested interest in this other than being as accurate as possible.
00;15;03;20 – 00;15;22;21
LANCE
We are a statistical organization here at USDA. I can promise you there is absolutely zero connection between the numbers that came out yesterday and any kind of political activity that happens, whether it’s, you know, within USDA or anywhere else. And so we’re statisticians, we just want the data to be as good as possible, and we want to make sure everybody has access at once.
00;15;22;21 – 00;15;40;26
LANCE
And if you’re out there doing this privately, God love you. You’re doing great work, but you probably have a different interest than what we have. And our interest is just making sure everybody’s got access. And you see that, right? Because there’s a lot of numbers floating out there and everybody reset. Yesterday we put a number out there. Everybody doesn’t mean they all like it doesn’t mean they all agree with it.
00;15;40;26 – 00;15;47;22
LANCE
But everybody got back on the same level and now they can work off of that until we come out with another number next month.
00;15;47;25 – 00;15;59;02
MIKE
And that’s going to be exciting to watch because as the numbers get big, you know, obviously some people wonder how big, you know, can this get in the following reports and you have a big job ahead of you. As you know.
00;15;59;04 – 00;16;12;21
LANCE
A second month is sometimes bigger than the first. Right? And I don’t mean bigger in terms of numbers, but you know, we’ve got a marker in the sand, right? And so now from here we see where things pivot from there. And so August is a pretty big report. But September is no slouch either.
00;16;12;25 – 00;16;17;20
MIKE
Lance, thanks again for your time and we appreciate your work and we appreciate you joining us here today.
00;16;17;22 – 00;16;19;00
LANCE
All right. I really appreciate it.
00;16;19;01 – 00;16;36;28
MIKE
Lance Holding, Agricultural Statistics Board chair and director of methodology at USDA. Nass want to thank him for his presence. We also want to thank you if you’ve enjoyed listening to From the Furrow, be sure to tell a friend or to and subscribe to us wherever you listen to your podcast. Thank you to the Ever Egg Insights Crew for their work on today’s show.
Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.
EVER.AG INSURANCE SERVICES IS A LICENSED INSURANCE AGENCY AND AN AFFILIATE OF EVER.AG. INFORMATION CONTAINED HEREIN IN THIS WEBSITE IS COMPILED FOR THE CONVENIENCE OF THE USER. INFORMATION IS OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE AND IS FURNISHED WITHOUT RESPONSIBILITY FOR ACCURACY OR CONTENT. MARKET DATA IS SUBJECT TO CHANGE AT ANY TIME. Ever.Ag is a licensed insurance agency in the following states: AZ, CA, CO, CT, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NM, NY, NC, ND, OK, OH, OR, PA, RI, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY.
—
The following music was used for this media project:
Music: Funky Intro 29 by TaigaSoundProd
Free download: https://filmmusic.io/song/9520-funky-intro-29
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://linktr.ee/taigasoundprod
© Ever.Ag 2023, confidential and proprietary.
The post From the Furrow – Lance Honig – August 13, 2024 appeared first on .
More shows like The Ever.Ag Podcast
View all
The Ramsey Show
38,986 Listeners
The EntreLeadership Podcast
4,390 Listeners
AgriTalk
153 Listeners
AgriTalk PM
134 Listeners
The Dividend Cafe
580 Listeners
The Business of Agriculture Podcast
124 Listeners
The Milk Check
21 Listeners
Progressive Dairy Podcast
19 Listeners
Dairy Defined
4 Listeners
Grain Markets and Other Stuff
342 Listeners
All-In with Chamath, Jason, Sacks Friedberg
9,807 Listeners
Let's Chat Dairy
16 Listeners
The Dairy Download
27 Listeners
Barn Talk
1,647 Listeners
Dairy Insights: Heard Mentality
8 Listeners