Fundamentally Speaking

With the release of the USDA planting intentions report the 2015 growing season will kick off with the trade wondering how this year's U.S. row crops will fare after record corn and soybean yields and production a year ago.

For soybeans, the 2014 national yield was 47.8 bushels per acre (bpa) a new all-time peak toping the old record of 44.0 bpa.

As noted in a similar piece recently did on corn, early season yield forecasts including the initial ones furnished by the USDA involve some sort of trend calculation.

This is what we have done three different ways all involving the 15, 20 and 25 year trends.

First we used just the U.S. final soybean yields and then we derived an 18 state yield incorporating the top producing states that the USDA reports on as far as crop progress and condition during the growing season and used that 18 state yield to arrive at a total U.S. yield using the average 18 state yield as a percent of the national yield.

Finally we calculated the 15, 20 and 25 year trend for all the 31 states that the USDA calculates soybean production for and derived a national yield using each states percent of national soybean production over the past 15, 20 and 25 years.

Using just the U.S. data the 15, 20 and 25 year trend yields were 45.3, 42.8 and 44.7 bpa respectively.

Using the weighed top 18 state yield as a proxy for the U.S. yield resulted in a 45.7, 43.1 and 45.0 bpa estimates.

Finally using all the 31 states the USDA reports for on soybean production resulted in a 15 year trend of 45.7 bpa, 43.1 bpa for the 20 year trend and 45.0 bpa for the 25 year trend.

As in corn, the 20 year trend yield was lower than the 15 and 25 year trends for all three separate calculations.

We assume this was based on the 20 year containing some very bad years but not including some excellent yielding years such as 1992 and 1994.

We note that the average for all nine calculations is 44.5 bpa and even the highest estimate of 45.7 bpa is below the USDA yield projection made at their February Outlook Forum of 46.0 bpa.

One thing to consider is that with increased 2015 soybean plantings anticipated, this large acreage base may contain some marginal ground that could suppress the national soybean yield though last year's record area did not prevent a new national soybean yield from being established.

(KA)