SPENCER, Iowa (DTN) -- I've had the chance to speak at quite a few meetings in both the Western and Eastern Corn Belt since harvest concluded last fall. And, the main issue by far on these occasions that I discuss and hear questions about is whether the big drought we went through in 2012 is going to put on a repeat performance in 2013. There's good reason for that concern. Heat and dryness were the worst since the 1950s. Corn yields sank like a relative stone. Prices soared. End users and export customers all felt the pinch.
Has there been some recovery on soil moisture? Yes, there has -- to a certain extent. East of the Mississippi River, enough precipitation has occurred that most of Illinois, Indiana, Ohio and Michigan are now judged to be out of drought conditions according to the Drought Monitor. The Delta is also drought-free. And, drought categories have improved by one classification in much of the Western Corn Belt and in portions of the Southern Plains.
But, there's still a lot more territory in drought than there was last year. Fifty-six percent of the continental U.S. is in Moderate to Exceptional Drought as of the Feb. 12 Drought Monitor, compared with 38% a year ago. Eighteen percent of the country has Stage 4 or Exceptional Drought versus 9% last year -- but that national percent is made up by these individual state numbers -- Nebraska 96% Stage 3 to 4 Drought; Oklahoma 87%; Kansas 75%; South Dakota 63%; Wyoming 57%; and Colorado 51%. Iowa gets into the act with 32% in Stage 3 (Extreme) Drought, and Minnesota has 25% in Stage 3 Drought.
And that's where the concern hits when it comes to this season. At this point, it's looking like a widely varied situation for soil moisture recharge -- with the Eastern Corn Belt doing better this season, and the Western Corn Belt having some trouble with recovery. Such an outlook, of course, brings up the question about how increased corn acreage will perform; most of the expected higher acreage numbers are in the northwestern Corn Belt, especially in the Dakotas.
As far as national yields are concerned, let's look at the past five years: 2008, 154 bushels per acre; 2009, 165; 2010, 151; 2011, 147; and 2012, 124. Yields, as colleague Joel Karlin has noted in a recent blog item, have been below trendline for three straight years. In the 62 years since the beginning of the hybrid corn era, that has never happened before.
So, given those trends, and the fact that there's such a dry situation is the Western Corn Belt, I think the idea of "Olympic averaging" is worth considering. In this exercise, the high and low of the past five years are thrown out, and the middle three years' yields are kept. And, averaging those three middle years -- 2008's 154, 2010's 151, and 2011's 147 -- the result is 150.6, rounded up to 151. And, I think that's a fair estimate of prospective yields given conditions that exist at this time.
Such a yield has a couple implications. First, it's certainly lower than the low 160s yield that USDA will likely announce at the outlook conference in Washington, D.C. this week. But, it also means a larger corn crop than a year ago -- in the neighborhood of 13 billion bushels. Such a projection means corn prices have a good chance of staying above the $4 per bushel level -- but it also is not a crop size that supports a return to the $8 cash bids that we saw during last summer. From a weather standpoint, price levels in the high $5-low $6 area seem more in line with the way conditions appear to be lining up.