Why Pro Farmer Corn Crop Estimates Are So Low for 2022

In its much-anticipated reveal, Pro Farmer has released its most recent U.S. soy bean and corn estimates for 2022, revealing some opposing narratives for both crops in comparison to what the USDA had previously reported. Utilizing crop tour data from nearly 3,400 crops across seven Midwestern states in the U.S., more thorough studies done by Pro Farmer found that corn in particular is expected to have a largely underwhelming season.

“The question heading into Crop Tour was whether there would be enough bushels in the eastern Corn Belt to offset the bushels lost in the drier western areas,” said Brian Grete, editor for Pro Farmer. “After Crop Tour, the answer is, clearly, there won’t be enough in the east to offset the west, not nearly enough.”

The USDA’s estimates landed at a forecast of 14.4 billion corn bushels for the 2022 growing season with an average 175.4 bushels per harvested acre. This would mean total output dipping 5% compared to 2021, while per-acre bushels would be down 1.6 bushels year-over-year.

Pro Farmer’s estimates are coming in even lower. Its Crop Tour concluded with corn production estimates at 13.76 billion total bushels, with an average 168.1 bushels per acre.

Grete and the Pro Farmer team were aware of the drought and heat stress defining the growing season and expected crop yield reductions. It was difficult to predict just how much said dryness would tank output, though, until they had boots on the ground.

“What surprised us was that we found kernel abortion, or as it’s known in the ag industry as tipback, on those ears in many of the samples that we pulled in Ohio and Indiana,” Grete said.

Kernel abortion occurs from lack of rainfall and heat stress and results in prematurely shriveled corn kernels. Basically, ovules are effectively pollinized and growing as intended but get fried by unwelcoming weather.

“In a nutshell…we can withstand drought, we can’t withstand heat and drought and that combination…zapped the corn in the western Corn Belt, it hurt the corn in the eastern Corn Belt more than anticipated, and as a result, the crop potential just isn’t there from what the USDA measured,” Grete said.

The biggest national corn grower is Iowa, and is by far the most critical to corn output in the U.S. The state is seeing some bright spots in the northeast corner, but heat and dryness continues to drag down crops in the region.

With the losses recorded in the west, it has started to add up the possibilities of a national production deficit and more global food inflation. The industry is seeing prices for both corn and soybeans climb as much as 2.2%.

“The farmer produces based on their bottom line, not necessarily what the market needs. How the market needs come into play is through the pricing,” Grete said. “If the farmer is given enough price incentive to switch their acres one way or the other, then that does have an impact.”

Once corn starts growing it has to keep up its growing pace, and to do so it needs moisture. Experts say, if there is too much heat or lack of moisture, corn growth is stunted and struggles to recover, much like warming up an engine, shutting it off for hours, and then having to wait for it to warm back up. This, in turn, takes away from total bushels outputted.

In what can be linked to adverse climate conditions, the main factors defining a challenging growing season and therefore mediocre corn yields have been largely out of farmers’ control.

At the same time, both the USDA and Pro Farmer found that climate conditions have been favorable for soy yields, meaning that if conditions persist, total output would reach the USDA’s two “record high” estimates of 4.53 billion bushels (2% higher than 2021) and 51.9 bushels per harvested acre.

Pro Farmer’s Crop Tour numbers line up with the USDA’s, predicting 4.535 billion total bushels and an average 51.7 bushels per acre. States like Minnesota and Iowa are sporting major increases in yield estimates compared to last year, with 13% and 5.3% growth respectively.

Pro Farmer’s report explains that recent rains in Iowa and Indiana came in clutch for giving pods enough moisture to finish strong, while just a bit more rainfall in Illinois would help “push much of the state’s soybean crop to the finish line” and reach the organization’s estimate of 64 bushels per acre in the state.

“We get a lot of questions about, ‘how can your corn number be that low and the soy beans be near a record.’ Well, quite honestly, what’s good for corn isn’t always the same as what’s as good for soy beans,” Grete said.

Grete also explained that soybeans need less nitrogen fertilizer, whereas corn needs more. This need for nitrogen is costly and is compounding with rising fertilizer prices, making corn production more expensive per acre.

To keep farmers afloat during this yield decline, Grete advises the use of federal government programs like relief funds and crop insurance.

“Crop insurance is a federal program, and a vast majority of our acres here are insured at a pretty high level through the government crop insurance program,” Grete said. “For the 2022 growing season there will be some crop insurance claims, no doubt about that. Especially in the western Corn Belt.”

It is also worth mentioning that there are dynamics changing within the U.S. soy industry, putting more pressure on soy bean crop output to perform.

“Over the next couple of years we’re going to be adding a lot of capacity expansion for soybean crushing, which of course means that some of the soy beans that would ordinarily be going to export channels would probably be consumed more domestically, and producing more meal and more oil,” said Mac Marshall, Vice President of Market Intelligence at the U.S. Soybean Export Council.

Yield is going to determine total production levels for those in the industry, and the total production would then dictate how much is consumed domestically versus what portion is sent through export channels.

“The world has been looking for the U.S. to deliver a strong crop this fall, and it seems like we’re poised to do that,” Marshall said. “In the 2020-2021 marketing year we exported over 61 million tons of whole beans. This year we’re on pace to not approach that record whole bean export volume, but we are still running a very strong overall export campaign this season.”

Those in the industry don’t seem too worried about this season’s soybean crop ending on a positive note.

“They just need a few more rains and warm weather,” Grete said.