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USDA’s August crop production forecast to be released Monday

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By Wes Nelson

Farm Service Agency

WILLMAR — On Monday, the U.S. Department of Agriculture will release one of its most anticipated reports of the year — the August crop production forecast. The reason why this report is considered so significant is because it provides USDA’s first production estimate of the size of this year’s corn and soybean crop based not only on information gathered from producer surveys, but by also assessing current crop conditions based on appraisals conducted by USDA enumerators of randomly selected field locations nationwide.

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Quite often, the release of the August crop production forecast has a dramatic impact on grain prices. Therefore, USDA strives to provide the agricultural community with estimates that are accurate, objective, reliable and timely. In addition, extensive measures are taken to prevent leaks of what could be market-sensitive information.

Crop production forecasts have two components — acres to be harvested and expected yield per acre. The preliminary corn and soybean acreage estimates are made using data obtained from a survey of farmers conducted during the first two weeks in June. Expected corn and soybean yields are obtained monthly, August through November, from both producer estimates and USDA’s field appraisals.

* Determining acres to be harvested:

The largest single survey conducted each year by USDA’s National Agricultural Statistics Service is the June agricultural survey. During the first two weeks in June, about 2,400 interviewers contact more than 125,000 farmers, either by telephone or in person, to obtain information on crop acreage, grain supplies and livestock inventories.

About 10,000 area segments are selected nationwide for the June survey. Using maps and aerial photos showing the exact location and boundaries of each sample segment, interviewers locate and interview each operator with land inside the segment boundaries to identify the crops planted in each field.

Producers are asked to report acreage, by crop, that has either been planted or they intend to plant, and the acreage they expect to harvest as grain.

Generally, estimates of planted acreage from the June survey are not changed during the crop season. However, if the planting season runs late and many fields are not yet planted with the intended crops at the time the survey is conducted, adjustments could be made to the planted acreage estimates when the August crop production forecast is released. Such could be the case this year regarding the soybean acreage estimate in Monday’s report.

If necessary, USDA will also revise their estimates of harvested acreage if during the growing season acres are lost or abandoned because of adverse weather or disease problems. For this reason, a monthly production forecast could be reduced without a corresponding drop in the forecasted yield. Also, projected yields could increase if USDA lowers the acres for harvest due to abandonment.

* Determining yield estimates:

To determine the monthly yield estimates, USDA selects a subsample of farmers who responded to the June agricultural survey. This provides USDA with a means to screen farmers so that only those currently growing the commodities of interest are contacted during the monthly yield surveys.

The sampled farmers are asked what they expect their crops to yield before harvest, and then what actual yields were once harvest is completed.

Crop appraisals are also conducted monthly by USDA in states that contribute most heavily to total U.S. production of corn and soybeans. The yield estimates from USDA’s appraisals are based on counts, measurements and weights obtained from small plots in randomly selected fields.

The same plots are revisited each month until the crop is mature. At that time, the plots are harvested and final counts and weights are obtained. After the entire field has been harvested, the sample field is revisited and two more plots are laid out. The grain left on the ground in these plots is gathered and weighed to determine the amount of harvest loss.

When harvest is complete, the farmers who operate the sample fields are re-contacted to obtain final harvested acres and yield for the sample field.

Corn yield estimates by appraisal are based on estimates of the number of ears and average ear weight. The ear count forecasts are accurate early in the season. When the crop is late in developing, the August projection of ears is based on a model using planting population. Historical average ear weights are used until ears are present to measure. Kernel row length models are then used to project ear weight until crop maturity.

Data from the yield surveys and appraisals reflect conditions as of the first of the month since data are collected during the last week of the previous month and the first two or three days of the current month.

All crop production forecasts assume normal conditions for the remainder of the growing season. Long-range weather projections are not used when determining final yield and production estimates.

However, crop maturity is evaluated against the time remaining until the first expected frost. If one-third or more of the crop will not reach maturity until the expected frost date has passed, it is assumed that some frost damage will result.

Dairy producers receive payments for June milk

Due to the combination of unusually high feeding costs and low milk prices, dairy producers will qualify for payments under the U.S. Department of Agriculture’s Milk Income Loss Contract program for milk produced and sold in June.

Initially authorized by the 2002 farm bill, and then reauthorized under the 2008 farm bill, the Milk Income Loss Contract program provides monthly financial assistance whenever the Boston Class I milk price falls below the payment trigger price of $16.94 per hundredweight. In that case, dairy producers qualify for a payment rate equal to 45 percent of the price difference.

Under the provisions of the 2008 farm bill, the $16.94 trigger price is adjusted upward whenever the monthly national average cost for a 16-percent protein feed ration is greater than $7.35 per hundredweight.

According to USDA, feeding costs for the month of June warranted an upward adjustment of the $16.94 trigger price to $22.66 per hundredweight. The Boston Class I milk price for June was $22.18, resulting in a final payment rate of approximately $0.22 per hundredweight.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.

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