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Indiana Crop Losses Now Potentially up to $475 Million

Indiana’s corn and soybean crops in a month of rain have gone from among the best to among the worst, with Purdue Extension agricultural economist Chris Hurt now estimating that production could decline by $475 million.

Indiana has dropped from having above average corn and soybean yield prospects in the first week of June to well below normal at the end of the month, noted Hurt, who analyzed the U.S. Department of Agriculture’s Crop Progress report released Monday (June 29).

“It is not hard to find the culprit – excessive amounts of rainfall,” he said Tuesday.

On June 8, the USDA’s Agricultural Statistics Service rated Indiana’s corn crop at the 77th percentile based on the previous 15 years. That means that this year’s crop was ranked about the eighth best out of 10 years based on the distribution of crop ratings from 2000 to 2014. Three weeks later, the Indiana corn crop is ranked at the 18 percentile, about the second worse crop out of 10 years.

Seventy-five percent of Indiana’s corn crop was rated good to excellent as of the USDA’s June 8 report. As of this week’s report, the crop dropped to 48 percent good to excellent.

The crop ratings from USDA can give an idea of the weather’s effect on yields by using a model that examines historic crop ratings and historic yields, Hurt said. Indiana’s corn yield potential in the June 8 report was 178 bushels per acre, 6 bushels higher than a “normal weather” yield of 172. The declines in crop conditions in the following three weeks dropped that model-determined yield to about 163 bushels per acre, a decline of 15 per acre and about 9 below a “normal weather” yield.

The decline of 15 bushels per acre since early June represents about 85 million bushels of corn with a value of $300 million, Hurt said.

“A similar story has occurred for soybeans,” Hurt said, with the crop rank dropping from the 84th percentile early in June to 25th by the end of the month. The model estimates of yield have dropped from nearly 53 bushels per acre in early June to 49.4 bushels by the end of the month.

That is a potential decline of about 20 million bushels of soybeans with an estimated value of $175 million, Hurt said.

Hurt noted that the potential yields for corn and soybeans are estimates based on weekly crop ratings from USDA of the latest week. “The current ratings can still improve during the rest of the growing season, and they can decline even more if weather remains harmful,” he said.

Hurt said that despite bleak current conditions, there are two potential positives for the crop economy: Prices that farmers receive for the crops likely will be higher on the reduced number of Indiana bushels produced, and crop insurance payments to farmers are likely to be higher, helping to offset some of the impacts of fewer bushels to sell.

Also, Hurt said, the impacts of the wet season on yields and prices will likely affect the amount of government payments farmers ultimately receive for their 2015 crops.

“Right now that appears to be reducing the expected government payments farmers may receive,” he said.

Although the eastern Corn Belt has suffered with too much water and lower yield prospects, states in the northwestern portion of the Corn Belt have above-normal corn and soybean yield prospects, Hurt said. As a result, the national corn and soybean yield prospects, based on the June 29 crop ratings, remain close to normal.

Source: Purdue University 

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