Widespread Drought, Unclear Yield Implications for Corn and Soybeans
An estimated 71% of the U.S. corn crop, nearly 74m acres, is in drought conditions. A similar situation is playing out for soybeans, with two-thirds of the crop in regions with drought. This Weekly Insights article will provide context around 2023 conditions and the potential yield implications.
Each summer, the weekly drought monitor updates are used to estimate how many acres are affected. These maps and estimates can distort our thinking in two ways. The first is that there is often no benchmark provided. Each year, there are acres of the U.S. crop in drought conditions, and, without context, it’s nearly impossible to determine if the current estimate of “XX million acres” is significant and meaningful.
To overcome this, Figure 1 plots the share of the U.S. corn crop in dry (in blue) and drought (in orange) conditions as of the second week of July. On average, 14% of the corn crop is in dry conditions, and another 16% is in drought conditions. At 2023 acreage levels, this equates to an average of 15m acres of corn in drought as normal, with a combined 28m in dry and drought conditions. Figure 1 also shows that even in years like 2019 – which had the wet spring and prevented planting conditions – and 2004 – which had an all-time high departure from trendline yield – have a small share of the crop facing drought.
All that said, 2023 conditions are approaching levels only exceeded by 2012. But even then, digging deeper into the data reveals that 2012 conditions aren’t identical.
Figure 2 plots the degree or magnitude of drought conditions in 2012 and 2023. In short, the 2023 corn crop is more heavily skewed to the tails. First, a higher share of the current crop is in dry conditions. Similarly, a higher share of the 2023 crop is also in the most extreme drought conditions, D3 and D4.
Again, the key idea here is that even though top-level measures are similar, the underlying drought conditions aren’t identical.
Figure 3 plots the share of the U.S. soybean crop in dry and drought conditions since 2000. The base rate is an average of 13% of the crop experiencing some degree of drought each year and 14% in dry conditions. This means that, on average, a larger share of the corn crop is in drought conditions. This difference is likely due to irrigated corn production in the Great Plains.
Again for soybeans, dry and drought conditions in 2023 are the most severe since 2012.
The second way drought maps and estimates of acreage in peril can distort our thinking is that the relationship between final yields and drought conditions is murky (Figure 4). While the 2012 data point stands out, there have been years with widespread drought conditions but decent yields. In 2021, 38% of the crop was in drought conditions with a final yield of just 1 bushel below the trend line. Similarly, yield in 2005 (+3.8bpa) and 2006 (+2.9bpa) were above trend despite drought conditions across nearly 30% of acreage.
Keep in mind that the drought monitor maps were started in 2000, so perhaps this relationship will be better understood with more years of data.
Wrapping It Up
When it comes to drought maps and acreage of production affected, two questions should come to mind: 1) how do conditions compare to the base rate or average? And 2) how strong is the relationship between these measures and final yields? For 2023, current drought conditions are considerably higher than normal levels and approaching 2012 conditions.
For final yields, it will be several months before this is confidently known, but it’s worth keeping in mind how the yield situation doesn’t appear anywhere near 2012 declines despite drought conditions that – at least in these data – are arguably similar. It’s worth pondering where the 2023 data point will end up, given we know that 71% of the crop was in drought conditions in mid-July.