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Drought Maps and Corn Yields

July 31, 2020

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The drought monitor maps have been everywhere this year. Flipping through, we can conclude conditions in mid-July are worse than the same time last year but not nearly as bad as 2012. Can we learn more? This week’s post considers recent drought monitor conditions and potential implications for the 2020 U.S. corn crop.

How Big of an Impact?

To provide a bit of context, we took county-level drought monitor data for the second week of July and compared it with county-level corn acreage estimates.

Figure 1 shows the extent of corn acres impacted by dry (in blue) and drought (in orange) conditions. Additionally, the dashed lines plot the average share of corn acres in dry conditions (14%) and drought conditions (14%).

For 2020, an estimated 44% of U.S. corn acres are in dry (30%) or drought (14%) conditions. On the surface, that’s eye-catching. However, keep in mind 28% of acres (14% + 14%) are in dry and drought conditions on average. Along similar lines, we wrote a few years ago about there always being millions of corn acres with low yields. In short, there are always acres in trouble.

While dry and drought conditions in 2020 are the most widespread in recent years, it’s a long way from July 2012 conditions. During that memorable year, 76% of corn acres were in drought conditions, and another 17% were in dry conditions.

Keep in mind the story in 2020 is mostly dry conditions (30% of corn acres in dry conditions vs. the average of 14%). Drought conditions are less prevalent and closer to the average. In other words, it’s dry conditions – not drought – that are catching most of our eyes when looking at the drought maps.

Finally, drought monitor conditions in 2020 are, perhaps, most similar to 2005, 2006, and 2007, which are years that will come up again in the next section.

2020 corn yield drought. ag economic insights.

Figure 1. Estimated Share of Corn Acres in Dry and Drought Conditions, 2000-2020. Data Source: National Drought Mitigation Center, USDA NASS, calculations.

What About Yield Implications?

With a large share of the crop in dry/drought conditions, the next question on our minds is, “What are the implications for yields?”

Figure 2 plots the annual estimated share of corn acres in drought conditions against the yield departure from trend. Overall, the trend line slopes down and to the right as we’d expect; more acres in drought, the lower the yield. However, we must be careful with observations like 2012 as it has a huge impact on the slope of that trend line.

Consider 2000, 2005, 2006, and 2007. In these four years, the share of corn acres in drought conditions was more widespread than current levels, but yields came in above-trend. On the other side of the coin, there are also years (2010, 2011) with fewer acres impacted by the drought, but yields came in below trend. In other words, the relationship between drought monitor conditions (and maps) isn’t as clear-cut as we might initially expect.

2020 corn yields and drought

Figure 2. Relationship Between Drought Conditions and National Corn Yields, 2000-2019. Data Source: National Drought Mitigation Center, USDA NASS, calculations.

Wrapping it Up

The first thing to note is how powerful these maps can be at influencing our thinking. However, it is really difficult to consider potential implications.

Overall, dry and drought conditions in 2020 are more widespread than in recent years. We estimated 44% of corn acres are in dry or drought conditions. That said, conditions are nowhere near 2012 levels. Furthermore, dryness – not drought – is the bigger story in 2020.

When thinking about possible implications, the relationship between final national yield and the extent of drought conditions is not a clear-cut as one would hope. There are several years (2005, 2006, 2007) that had more extensive drought conditions in mid-July but with above-trend final yields. Conversely, years with less extensive drought conditions have had below-trend yields.

There are several reasons why the relationship between drought conditions and final yields is tricky. Perhaps the most remarkable is the impact of timely received (or missed) rains.

The goal of this article is to help inform our decision-making process. In this case, the biggest lesson is to exercise caution when thinking about national-level yields as the relationship is less clear-cut than one might expect.

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Source: Agricultural Economic Insights