Economic Tidbits

Larger Crop Production in 2023

The USDA National Agricultural Statistics Service (NASS) projects Nebraska’s corn and soybean production this year will be larger than last year but fall short of 2021 records. NASS released its first crop production forecasts on August 11. Corn production is pegged at 1.685 billion bushels, up 16 percent compared to last year, with an average yield of 185 bushels per acre. Last year’s average yield was 165 bushels. Soybean yield is pegged at 58 bushels per acre, it was 49 bushels last year, with total production forecast at 316.1 million bushels, up 13.6 percent. Forecast production, if realized, would fall well short of records set in 2021 of 1.855 billion bushels for corn and 351 million bushels for soybeans. Nationally, corn production is forecast at 15.1 billion bushels, up 10 percent, while soybean production is forecast at 4.21 billion bushels, down 2 percent.

History shows that the NASS August yield estimates for Nebraska corn and soybeans are remarkably prescient. Figure 1 graphs August forecasts of average corn yields (orange line) with actual yields (blue line) between 1980-2022. The grey line plots the differences between actual and estimated yields. A point on the grey line above zero indicates actual yield exceeded the estimate. On average, August estimated yields exceeded actual yields by 0.72 bushels per acre over the period. The differences between actual and estimated yields averaged 0.78 percent of actual. The largest misses, in percentage terms, occurred in 1983 and 1993 when NASS overestimated yields by 16 percent (16 bushels) and 19 percent (20 bushels), respectively. Last year’s yield estimate overshot actual yield by 16 bushels, roughly 10 percent, most likely due to the worsening drought during late summer and early fall.

FIGURE 1. NEBRASKA CORN YIELD, ACTUAL VS. AUGUST ESTIMATE

Source: USDA National Agricultural Statistics Service

Figure 2 depicts the same information for soybeans. On average, NASS estimates were less than actual yields by 0.57 bushels. The biggest misses occurred in 1984 and 1983 when NASS underestimated yields by 27 percent (7.0 bushels) and 26 percent (7.5 bushels), respectively. Last year’s estimate exceeded actual yields by 6 bushels, or 12 percent. 

FIGURE 2. NEBRASKA SOYBEAN YIELD, ACTUAL VS. AUGUST ESTIMATE

Source: USDA National Agricultural Statistics Service

Given the historical accuracy of the August yield estimates, it’s a fair bet this year’s corn and soybean yields and production will be larger compared to last year. Moreover, NASS projects production for all major Nebraska spring crops will exceed last year: sorghum, up 207 percent; dry edible beans, up 2 percent; sugar beets, up 36 percent; alfalfa hay, up 7 percent, and all other hay, up 48 percent. Prices are mostly lower this year compared to last, so the larger crops may not translate into revenue increases. The revenue uncertainty combined with higher costs suggest income for crop producers could be less this year. 

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