How USDA Makes Crop Acreage Estimates

How USDA Makes Crop Acreage Estimates

How does USDA come up with the official estimates of planted acreage it releases on June 30 each year? Here's a look at the science behind USDA's Crop Acreage Report.

Each year on June 30 USDA releases its Crop Acreage Report, the annual official estimates of how much farmland farmers planted each spring to corn, soybeans and other crops. These are very important numbers, affecting prices and giving the market a more solid footing, a better idea regarding projected crop supplies.

This year's Crop Acreage Report released June 30 was one of the more important such reports in recent years, anxiously awaited and anticipated by both producers and users of grain. Crop supplies and demand are tight, prices are high and the world needs a big crop to harvest in 2011. Planting was late this spring in many areas of the U.S. and there have been flood-related crop losses.

How does USDA come up with the official estimates of planted acreage? Steve Johnson, an Iowa State University Extension farm management specialist, explains the process in a webcast and a handout he has put together. Both are available on his website www.extension.iastate.edu/polk/farmmanagement.htm. Go to that site and click on "Crop Marketing Strategies" to read his handout titled June 30th Report Key for Planted, Not Harvested Acres. Also, on that same page you can listen to and view his presentation by clicking on his webcast titled Science Behind the USDA Crop Acreage Report.

Uncertainty surrounds 2011 USDA Crop Acreage Report

A great deal of uncertainty surrounds the 2011 USDA Crop Acreage Report which was released June 30. Because of late planting and flood related issues, acreage uncertainty will linger for several months. Many traders are looking past the number of acres that were planted this spring following June 30. Instead they will focus on how many acres will likely be harvested this fall. "This is the number that counts toward total crop production," notes Johnson.

The table below shows USDA's June 30, 2011 estimate of U.S. planted acres. These actual USDA estimates are 92.3 million acres for corn and 75.2 million acres for soybeans, as shown in the left hand column in the table.

USDA says more corn, less soybeans planted in 2011

The 92.3 million acre USDA estimate for corn is well above the range of prior estimates made by the grain trade. The average of those grain trade estimates was 90.77 made prior to June 30. USDA's previous estimate was on June 9 at 90.7 million acres. USDA's estimate in March was 92.18 million acres, based on its planting intentions survey of farmers. The final acreage estimate for the previous year was 88.19 million acres of corn planted in the U.S. in 2010.

For soybeans, USDA's June 30, 2011 estimate is 75.2 million acres are actually planted in the U.S. this year. Prior to this report being released, the average guess of the grain trade was 76.53 million acres of soybeans planted in 2011.

On June 9 USDA had estimated that 76.6 million acres of soybeans would be planted for 2011. In March the USDA estimate was for 76.61 million acres of soybeans, based on USDA's 2011 planting intentions survey of farmers. The final estimate for last year was 77.40 million acres of soybeans were planted in the U.S. in 2010.

Trade Estimates vs. Previous USDA Reports

Crop      Actual USDA    Grain trade         USDA                USDA                    2010
              Estimate          
Avg. guess         stimate           Estimate               Final

              June 30             June  2011        June 9            March 2011        Planted   

Corn        92.3                90.77               90.7                 92.18               88.19

Soybeans 75.2               76.53               76.6                 76.61               77.40

Note: These are number of acres in millions for U.S plantings.

Also in his handout that is available online, Johnson has graphs showing both U.S. Corn and Soybean Acres. The line graphs show planted acres as the top line since 1990. The bottom line represents harvested acres. In recent years, that difference annually for corn has been roughly 8%. It represents acres not harvested for grain, such as seed corn, silage, food grain corn and acres that were planted but not harvested.

What about soybeans? The difference between planted and harvested acres for soybeans is typically 1% annually.

When will next USDA update reflect harvested acres?

Following the June 30 Crop Acreage Report provided by the USDA National Ag Statistics Service (NASS), you should watch for the USDA's July 12 WASDE report for changes in planted vs. harvested acres greater than 1% for soybeans.

Subsequent changes in both planted and harvested acres from USDA will likely be minor until the October 12 report, says Johnson. That's when USDA NASS reconciles to the USDA Farm Service Agency (FSA) certified crop acreage data collected nationwide from farmers.

Satellites help estimate acres lost to flooding

Another tool for estimating crop planted acres and acres lost due to flooding are satellite images provided by the low earth orbiting satellites. USDA reconciles to this data prior to the October report, but you can expect private industry to report estimates well in advance of October.

For example, on June 28, 2011 spokespersons for Lanworth, Inc., discussed their models used to estimate acres. They indicated that the flooding from the Missouri River floods will impact more acres than was realized from both the Ohio River and the Mississippi River floods in May. They estimated that flood waters along the Missouri River could impact 400,000 acres of corn and 350,000 acres of soybeans.

Their models indicated that U.S. corn yield trends could be slightly below trend yields based on their early models, but that U.S. soybean acres would be below trend. It is still too early to determine the total acres lost to flooding and the impact on final crop production that weather will have in 2011.

CONCLUSION: Harvested acres are more important

"While the crop planted acreage numbers are anxiously anticipated, the harvested acres are a much more important component in determining the final crop production numbers," sums up Johnson. "USDA uses extremely sound scientific measures in order to determine both acreage and yield estimates that lead to the final 2011 production numbers that will be released in January of 2012."

Given the tight global ending stocks for the marketing year that ends August 31, 2011, the futures trade will look at a variety of methods to gain insight into the size of the 2011 U.S. crops, he notes. You can expect an unusual number of private estimates reported by the media for both acres and yields that use a variety of traditional and emerging technologies.

Johnson offers this final bit of advice, as farmers watch and interpret information regarding the expected crop size this year: "You need to discern information that has been collected from meticulous scientific methods vs. private estimates that tend not to use sound sampling methods from large populations."

For more farm management information and analysis, go to ISU's Ag Decision Maker site www.extension.iastate.edu/agdm and ISU Extension farm management specialist Steve Johnson's site www.extension.iastate.edu/polk/farmmanagement.htm
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