AER Ag Blog Update

March 2021 Corn Outlook

Dr. Eric Hunt, Staff Scientist

Dr. Judah Cohen, Director of Seasonal Forecasting

The Bottom-Line Up Front

Atmospheric and Environmental Research is applying our world-class seasonal forecasting to give the agricultural community information to make better-informed decisions with actionable yield projections for the upcoming season. The analogs from our current seasonal forecast model suggest the 2021 national corn yield will be 181.2 bushels per acre (bpa) with a total production of 15.22 billion bushels (Figure 1, below). This forecast yield is an increase of 9.2 bpa over 2020 and ~ 2 bpa above trend. This production estimate is ~1.02 billion bushels higher compared to 2020 and is based on an estimate of 84.0 million harvested acres. The AER yield and production estimates respectively are 2.2 bpa and 238 million bushels higher than the USDA estimate for the upcoming season.

Figure 1. Distribution of corn production (top; billions of bushels) and yield (bottom; bpa) based on the weighting of our forecast. The most likely range for production is between 14.7 and 15.4 billion bushels and 175-184 bpa for yield. Excluding outliers, the worst (best) case scenarios based on our forecast are 14.1 (15.9) billion bushels for production and 167 (190) bpa for yield. At-trend is assumed to be 179 bpa.

The Details

The February analogs suggest above trend corn is probable in 2021. Indeed, our current forecast is for corn to finish 1.2 points above trend at the national level. However, our current forecast also suggests roughly a 33 percent chance of below trend corn. This is right at the long-term probability for below trend corn and is classified as a Category 1 risk of below trend corn. Of the years with AER analogs (2001-present), the majority of seasons have fallen into the Category 1 risk level (Figure 2, below). The risk categories are as follows:

Category 1: Analogs for a particular year show a 33 percent chance or less of below trend corn.
Category 2: Analogs for a particular year show between a 33 and 66 percent chance of below trend corn.
Category 3: Analogs for a particular year show a 66 percent chance or greater of below trend corn.

Figure 2. Risk categories for below trend corn based on past seasons with analogs (2001-2020).

It is our current expectation that corn will finish slightly above trend with lower risk for below trend corn. Of the past years that fell into category 1 with the February analogs, only three (~ 20%) ended up below trend (2010, 2011, 2019). In contrast, of the three years that fell into category 3 (2002, 2012, 2020), all three ended up below trend. So that does increase confidence in a lower risk for below trend corn in 2021.

But that does not mean there is no risk for below trend corn. Indeed, the forecast does indicate about a 1 in 6 chance for the season to have significantly below trend corn, which is not something that has been in our forecast the past few years. Thus, while yields less than last season’s 172 bpa are unlikely, they should not be viewed as impossible. There is a slight chance for corn yield to be in the 185-190 bpa range but significantly above trend corn is highly unlikely this season.

Here are the reasons we are cautiously optimistic about above trend corn this season:

Conditions have improved over the western Corn Belt since early last fall. Pockets of severe drought still exist and this entire region will still need ample moisture this spring. But the worst-case scenario for a very dry and warm winter did not materialize and drought is less prevalent than it was last October.
The closest matching analog this season is 2018, which also featured a polar vortex disruption and a weakening La Nina in the three months prior to the season. For what it’s worth, current anomaly correlations of the soil moisture index are also most closely aligned to the same period in 2018 than the other analogs. We are not currently expecting April 2021 to be as cool as April 2018.
With one exception, the analogs are not suggestive of significant production disruptions in the ‘I’ state region or to irrigated corn production in Nebraska.
Prior to the four-year period from 2010-2013, U.S. corn had not been below trend for three consecutive years since the mid-1990s and before that it was the 1970s. This by itself does not mean corn won’t be below trend this year; it just simply means that three consecutive years of below trend is unusual.

Here are a few reasons why 2021 could end up being a poor growing season:

There is less margin for a dry spring this season in the western Corn Belt than usual. While soil moisture has improved since last fall, there is generally not enough reserve moisture going into the season currently to offset below normal precipitation this spring and summer.
There is a stronger signal in the analogs for July precipitation to be below average, especially across the southern and western sections of the Corn Belt. If that materializes and is coupled with heat, rainfed corn production in Kansas, Nebraska, and western Iowa will take a hit.
There is some risk for a less than ideal start to the growing season across the Eastern Corn Belt and extended periods of cool, wet conditions in the spring shouldn’t be ruled out. Should a large ridge develop over the Great Plains region of the U.S., the eastern section of the Corn Belt would be at increased risk for excessive precipitation and high wind events in July and August.
One of the analogs is 2012 and while a season that more closely mirrors 2018 is the current expectation, we cannot rule out a season that sees massive development of flash drought over the central U.S. and taking corn yields down below 160 bpa. The months of May and June will be the critical time period for the inception of such an event.

Corn Yield Risk for Crop Reporting Districts:

While the risk of below trend corn nationally is not high, the risk is not spatially equitable. The analogs suggest that the highest risk of below trend corn is outside the Corn Belt and over the southern and eastern sections of the Corn Belt. There is certainly some risk of below trend corn in most of the highly productive areas of the ‘I’ states but at this time, the risk for below trend corn in the top 15 producing districts (see Figure 3) is a bit lower than outside the Corn Belt. The lowest risk at the present time is in Minnesota.

We have broken the map into four risk categories for below trend corn this upcoming season for each district:

Marginal (M, white): A relatively low (but not zero) risk of below-trend corn. This does not necessarily equate to an increased probability for significantly above trend corn though.
Slightly elevated (S, yellow): The analogs suggest a slightly elevated but less than 50 percent chance for below trend corn.
Enhanced (E, orange): Below trend corn is likely though isolated pockets of above trend corn are possible
High (H, red): There is a high risk for below trend corn and some risk for significantly below trend corn according to the analogs.

Figure 3. Categorical projections of below trend corn yield risk for the 60 crop reporting districts in the U.S. Corn Belt. M- Marginal risk (white); S- Slightly elevated risk (yellow); E- Enhanced risk (orange); H- High risk+ (red). In Nebraska, the color is for rainfed corn but the risk for irrigated corn is designated by the first letter. The districts with asterisks were in the top quartile for corn production over a twenty-year period spanning 1999-2018, as shown in Hunt et al. (2020).

The Methods

Our February corn forecast is based on a proprietary weighting scheme using analog years. For this season, the analog seasons are 2006, 2008, 2009, 2011, 2012, and 2018. The analog years from the AER seasonal forecast are based on a number of factors, including phase of ENSO, predominant phase of the Arctic Oscillation and strength of the polar vortex. Corn yield forecasts later in the season will incorporate season to date conditions, the AER forecast for the remainder of the season, historic yield, production, and acreage data from NASS, and a proprietary parametric model. General details on the AER seasonal forecast can be found on our website. For more specific questions, please contact Eric Hunt at ehunt@aer.com.

About the authors:

Dr. Eric Hunt is an agricultural climatologist from Lincoln, NE and has several members of his extended family actively farming in Illinois and Nebraska. Eric has been with AER since 2012 and received his Ph.D. from the University of Nebraska. Among other activities, he is currently working on NASA funded projects to study the evolution of flash drought. He routinely blogs about agriculture and weather on the AER website.

Dr. Judah Cohen is the Director of Seasonal Forecasting at AER’s home office in Lexington, MA. Judah has been with AER since 1998 and received his Ph.D. from Columbia University. Judah is perhaps best known for his NSF funded work documenting Arctic-midlatitude connections and the Arctic Oscillation, which he routinely blogs about on AER’s website.

About AER:

Founded in 1977, Atmospheric and Environmental Research is an award-winning environmental research, consulting and weather information services company with demonstrated expertise in numerical weather prediction, climate dynamics and radiation, circulation diagnostics, atmospheric chemistry, air quality and risk assessment, planetary sciences, remote sensing, satellite meteorology, and systems engineering. Consulting services are available. AER is a business unit of Verisk Analytics (VRSK). For more information, please visit our web site at www.aer.com.

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