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Released: May 10, 2001 Gloomy USDA Estimates May Still Be Too High MANHATTAN, Kan. – The industry was expecting less than happy news from USDA’s first estimate for the winter wheat now growing in the field. But USDA’s May 10 outlook put that crop’s harvest potential below the industry’s most pessimistic pre-report forecast. And, in the middle of the nation’s breadbasket, Kansas State University economist Bill Tierney is saying even USDA’s estimate may be too high. USDA put the total winter wheat crop at 1.34 billion bushels. That’s 81 million bushels (5.9 percent) less than the industry’s average expectation and 221 million bushels (14 percent) under last year’s U.S. harvest. "The 2001 crop is down due to a combination of lower harvested acres – which USDA expects to be down 8.3 percent – and lower yields – which USDA is predicting will be down 6.3 percent from last year’s," Tierney said. Since 1950, USDA’s May crop report has underestimated the final harvest far more often than not, he added. But this year seems primed to be an exception. As K-State Research and Extension’s grain marketing specialist, Tierney does weekly wheat crop analyses. They produce an index that reflects field reports on both crop progress and condition. For the first full week in May, that index came in at 326 (400 is good and 300 is fair). "That’s 42 points under where the crop was last year at that time. It’s 25 points less than the 15-year average for early May," the economist said. "When you plug that index into a computer model, the projection for overall winter wheat yields comes out at 41.2 bushels – more than one-half a bushel less than USDA’s May 10 estimate and 3.4 bushels lass than last year’s average yield per acre." Even if farmers abandon no more acres than USDA now predicts, that yield difference could take the year’s harvest 20 million bushels lower than USDA’s May 10 forecast, he said. Using the index to assess wheat by class, Tierney found similar results – except for soft white winter varieties: * Current hard red winter wheat crop conditions point to average yields of 32.7 bushels – 1.5 bushels under the projection implied by USDA’s May 10 figures and 3.1 bushels less than last year’s average yield. With harvested acres at USDA’s predicted level, production could total 686 million bushels or some 32 million bushels less than USDA expects. * Soft red white wheat conditions are indicating the possibility of 54.2-bushel average yields. That’s 1.1 bushels under USDA’s outlook and 3.7 bushels below last year’s average. It’s also enough to take the year’s production to 401 million bushels – 9 million bushels less than the official May estimate. * Soft white winter wheat crop conditions for early May suggest a final yield average of 70.2 bushels. That’s 4.5 bushels less than last year’s yield average. But, it’s also 6.4 bushels more than implied in USDA’s outlook for 2001, and it could lead to a harvest of 235 million bushels (22 million more than May’s estimate). "Winter wheat is a tough crop. It has fooled forecasters more than once," Tierney said. "This year, however, crop progress and condition have kept the index on a gradual decline for weeks. Besides, if weather improvements arrive late, they can only do so much – even with wheat. "Many farmers already are worried about waiting around to see what happens. Some have abandoned acreage. Others are deciding whether to replant with another crop. And what they do as a group could make a big difference in how accurate the May forecasts turn out to be." -30- K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan. Story by: Bill Tierney is at wtierney@agecon.ksu.edu |