The Charts of Summer 2022, Part Two: Production & Export Trends
We’re back with the second installment of our roundup of the most insightful charts of the summer. Click here to review Part One, which was posted last week. Today, our focus turns to production and export trends.
Ag Exports Navigate Potential Headwinds from a Stronger Dollar
“…[H]igher commodity prices and exchange rate issues make conditions extremely difficult for some international buyers. While [farm-level] U.S. corn prices are largely unchanged from a decade ago, buyers from Mexico or Japan likely face very different, more expensive conditions given the strong U.S. Dollar.”
China On Pace For Another Record
“Without a trade war or Phase 1 trade agreement, trade with China has been largely overlooked. Perhaps ironically, China’s activity in 2022 is, again, on pace for a record. The final tally is a long way out, especially for soybeans, but activity has been impressive and noteworthy.
There are a few factors driving the uptick in dollars of trade. One is the unprecedented volume of beef and corn exports. While corn is mostly unchanged from last year, it’s an impressive pace to have maintained. With beef, activity continues to increase in surprising leaps and bounds.”
52% of the U.S. Corn Crop In Drought Conditions in July
“Since 2000, we can see that every year some share of the U.S. corn crop is experiencing drought… On average, 14% of the crop is in dry conditions, while another 16% is in drought conditions. I think most would be surprised to hear that an average of 30% of the corn crop experiences some degree of dry or drought conditions in early July…
It’s important to use caution when drawing conclusions about the national yield potential by simply glancing at a drought map. For 2022, we found that an above-average share of the U.S. corn and soybean crop is in dry and drought conditions. Even with that information, however, it is difficult – if not impossible – to draw conclusions about national yields from these data. For most of us, the drought monitor maps can be distortive to our thinking.”
Read more from AEI Premium: Sizing Up the 2022 Drought Situation
Not Just Soybeans, All Oilseeds
“Across all sources, global vegetable oil production has grown significantly and rather consistently over the past 22 years (Figure 2). Since 2000, a trendline of global vegetable oil production shows that, on average, production increased at a rate of +6.17 million metric tons per year. Another way of framing the growth is that the annualized growth rate was 3.9%.”
Read more from AEI Premium: Global Vegetable Oil Trends
Double Crop Acreage and Limited Data
“Overall, double-cropping accounts for a small share of soybean acres. In 2021, the estimated 4.4m acres accounted for 5% of total planted soybeans. However, these acres shouldn’t be dismissed as their contributions are on the margin. In other words, any increase in double-cropped acres adds to the overall production. Since 2019, these acres have increased by nearly 1.4m acres.
Lastly, in wrapping up this article I was left wondering about the role of crop insurance in the decision to double-crop. In states like Kansas (7%) and Missouri (6%), only a small share of total soybean production was double-cropped. Admittedly there are county-level considerations about crop insurance availability, but at the same time, the data suggest that in North Carolina double-crop acreage is more prevalent – as a share of the total, and in total – with no crop insurance data reported. This isn’t to say crop insurance isn’t important, but to acknowledge that crop insurance doesn’t appear to be the only consideration or barrier to adoption.”
Read more from AEI Premium: Quantifying U.S. Double Crop Acres
Do we have a Corn Usage Problem?
“The USDA estimated 14.6 billion bushels of total corn usage for the 2022/23 marketing year. While the estimate is roughly 2.5% below the all-time record of 14.9 billion bushels from last year, that doesn’t quite capture the full story.
… While the USDA’s initial projection for 2022/23 is only 2% below last year’s record, it’s also roughly 1 billion bushels, or 7%, below the trend line. On a bushel basis, corn usage for 2022/23 is estimated as the second-largest slump since 2000. Only in 2012, at 1.8 billion bushels (17%) below the trendline, was usage further from the trendline.”
Wishing you a safe and successful fall season. In the middle of a busy year, it can be tough to find the time to reflect. Hone your decision-making skills by subscribing to AEI.ag’s weekly updates.