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Implications of FSA report
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1234
Posted 9/17/2014 07:55 (#4078787)
Subject: Implications of FSA report



Death comes to us all. Life's but a walking shadow
First, thank you Jamie for the suggestion that we might want to look more closely at the FSA report.
Second, I started this analysis in order to try to find the 5 million acres that went missing last June in the June planted acres report. The FSA acreage data seems to answer that question but not in the way I expected. For instance, in Illinois corn acres did decline but the greater share of the increase in soybean acres came from wheat acres. In contrast, in North Dakota there was a dramatic drop in corn acres, a dramatic increase in soybean acres but an equally dramatic increase in wheat. I was pleased to see that the FSA data did account for most of the 100,000 acre discrepancy here in NY.
But what I discovered might just be more interesting. It isn't easy to reconcile USDA's acreage reports with FSA reports. They are not reporting the exact same data and to make matters worse USDA doesn't report a complete data set but lumps several states into the category of "other states". The FSA on the other hand even reports data from Alaska and Puerto Rico.
In any event I spent several hours last night and this morning trying to do that. I don't have time to prepare and present the tables to clearly illustrate my conclusions but I'll try to summarize.
One, if you use the standard adjustment factors provide by Illdoc you come to a similar conclusion but you miss the nuance of a state by state analysis. The Illdoc factors work very well for the core corn states but fail for most others by sometimes large percentages (30% or more). This means that either the FSA offices in those several states are completely and irrevocably incompetent and should be fired immediately OR they are reporting substantial corn acres declines. JonSCKs and I have an ongoing discussion with Tara and others about producers' response to lower prices. JonSCKs and I feel that corn acres will decline rapidly and Tara et al don't. It turns out that we may both be correct.
If the FSA data is even reasonably correct corn acres harvested for grain will be on the order of 80 million acres. Even if you apply the latest USDA yield estimates 2014 corn production will be in the neighborhood of 13.5 billion bushel.
Upwards of a billion bushel has just been removed from 2015 carryout.

PS: I think it was JonSCKs who several months ago now argued that corn production this year would be about 13.5 billion bushel. Congratulations Jon.

Edited by 1234 9/17/2014 07:58
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