Corn’s Slow Planting Pace and Potential Yield Implications

The number everyone was talking about after the May WASDE was 177, the USDA’s corn yield estimate for the 2022 crop. The starting point for this year – or what history would suggest was a trend-normal yield – was 181 bushels per acre. In the report, the USDA attributed the four-bushel adjustment to the slow planting pace:

“The (corn) yield projection is based on a weather-adjusted trend, estimated using the 1988-2021 time period, assuming normal summer growing season weather but lowered to reflect the slow pace of planting progress as of early May.” (Emphasis mine.)

With all this in mind, we wanted to step back and provide an updated look at the current situation.

Reviewing Progress

Each week the USDA provides an estimate of how much of the corn crop is planted (Figure 1). Additionally, the USDA uses planting progress as of mid-May as a variable in their corn planting models. On average, about 70% of the corn crop is planted by this time of the year. For 2022, Week 19 progress was 49% of the U.S. corn crop planted.

As we previously mentioned, not every week of planting progress is the same. Weeks 17 through 19 are typically the fastest weeks as average progress is 15-20 percentage points per week. Since planting pace isn’t uniform, it can be hard to size up how far behind the pace in a given year really is.

For example, 49% of the crop is planted as of Week 19, compared to the long-run average of nearly 70%, a seemingly large gap. However, the long-run average for Week 18 is 52% complete. While you could accurately summarize the 2022 situation as being 1) lagged by 20 percentage points or 2) a little more than a week behind pace, the two statements will likely affect our thinking differently.

Figure 1. U.S. Corn Planting Progress, 2010-2021. Data Source: USDA NASS.

 

Flashbacks to 2019?

Many have wondered how the current situation compares to 2019 when planting was significantly delayed and resulted in record prevented planting. At the national level, there are a few key differences to keep in mind. First, while the 2022 crop is a week behind normal, the pace is also roughly a week ahead of 2019 conditions. More specifically, 30% of acres were planted in Week 19 of 2019, and 49% were planted by Week 20. Second, what made 2019 so difficult is the planting pace continued to be sluggish throughout May and early June. Taken together, parallels to 2019 might be appropriate if planting delays continue and, for example, it takes until Week 23 to cross the 70% planted threshold, as it did in 2019.

 

National Yield Effect

Following the USDA’s Westcott-Jewison Model, we can assume each point of planting progress in mid-May is worth 0.29 bushels per acre towards the national yield. Given the crop is 21 points behind normal, a starting point for sizing up the potential effect is 6.1 bushels off the national yields (21*0.29). This is roughly the logic the USDA followed when adjusting the May WASDE yield estimate four bushels below the trend-normal yield (177 versus 181). Of course, the USDA didn’t know mid-May progress would be 49% when making the May WASDE yield estimate, but it was clear the 70% threshold was very unlikely.

 

Historic Relationship

A second way of considering the current situation and what we can learn from history is plotting the relationship between planting progress and final yields. Plotted along the horizontal axis of Figure 2 is when an estimated 50% of the corn crop is planted. Given that 49% of the crop was planted at Week 19 in 2022, the 50% threshold will be planted somewhere to the right of the line at Week 19. While the current pace is the third slowest since 2000 (Figure 1), it’s also the sixth year since 1988 to cross the halfway point after Week 19.

The vertical axis corresponds with the final yield for the year, measured as a departure from the trend yield. While four of the five years with late planting have been below the trend line, much yield uncertainty remains. First, yields in 2009 finished the year nearly 12 bushels above the trendline. This is to say, big yields are possible with a late-planted crop. Second, the outcomes in 2013 (-3.1 bushel departed from trend) and 2019 (-6.5 bushels departed from trend) are largely in line with the USDA’s current adjustment. At the extremes, however, conditions in 1995 (-9.6 bushels departed from trend) and 1993 (-18.2 bushels from trend) resulted in yields considerably lower.

Figure 2. Corn Planting Progress and Final Yields (1988-2021). Data Source: USDA’s NASS and AEI.ag calculations.

Wrapping it Up

The implications of slow planting conditions in 2022 have translated into lower corn yield estimates. In the May WASDE report, the USDA lowered the yield estimate by four bushels. Similarly, using the latest data and assumptions from the Westcott-Jewison model, an adjustment closer to 6 bushels lower might be appropriate. While these values provide context around the magnitude of potential yield effects, we can’t ignore the uncertainty.

Weather conditions throughout the summer months will have a significant effect on final yields. Historically speaking, years with late planting conditions have finished the year with final yields ranging from a -18 to +12 bushels departure from the trend line.

Finally, Brent provided a great summary of the situation: The current corn planting situation puts a few more “below trend” cards in the deck, but it’s hard to know exactly how many more.

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