From GENE LOGSDON
There are two things that a journalist should learn to avoid: making generalizations about human conduct and making predictions about the weather. Whatever one says about human behavior, there are individuals somewhere who will make a liar out of you. Ditto with the weather— I have a hunch climate change will cause more red faces in the next fifty years than red sunsets.
My red face is about predicting this year’s corn crop. Even though I still could be right, I should know better. There is so much corn growing over the face of the earth this year, even if you get it right for one locality, the yield in another—including another country— might cancel out the significance of your numbers.
A few posts ago, I wrote that the corn crop this year would be a record high, based on what I could see across the road from our house and what a friend in Iowa could see across the road from his house. Two local landscapes do not an accurate forecast make. My friend now writes that while corn in his area, the northeast corner of Iowa, is still mighty good, the story is different over the rest of the state. As for me, if I had just driven three miles, I could have found several hundred acres of good river bottomland corn totally destroyed by high water. That might have influenced me a little differently. And as many of you responded to that post, the corn in your areas was not so hot either.
I regularly read the expert predictions about the corn crop, mostly because they make for amusing humor writing. They gabble on about black layer in the kernels and receding ear tips, lodged stalks, heat degree days and average first frost dates. There is an inordinate amount of time spent on these minutiae because there are thousands of moneychangers whose paper profits come from betting correctly on corn yields. In addition many more thousands of farmers and food processors are trying to keep their asses covered in the futures markets. So if the weather has been dry, three drops of rain will drop the corn price twenty cents in one day. Or, if someone finds that the tips of the ears in three fields in the middle of Illinois have not filled out completely, the price shoots up 30 cents. It is difficult for an outsider to adjust his mind to all this. News that makes the crop look better means poorer. News that the crop is worse makes the prices skyrocket. The trader does not care about the crop itself, but is just trying to buy or sell quicker than the others. In fact it may just be his computer that does the reacting. And now farmers have become traders too. One day a few years ago, I was sitting in a grain elevator chatting with two big grain growers. They both kept one eye peeled on the Chicago Board of Trade figures flowing across the screen on the wall. Suddenly the prices started rising precipitously and both farmers leaped from their chairs and battled each other for the phone on the wall. Today of course they would just reach for their cell phones and see who could punch keys faster. The economists call this “price discovery” and insist that it is all for the good.
The crop yield prophets are full of words: “power-blocking high pressure” aka “dome of doom”, el nino and el baloneyo, soybean rust, resistant rootworms, hurricanes about to fire up, jet streams high over the Arctic. When all else fails, trot out the latest on climate change.
On DTN/Progressive Farmer online, I followed one particularly determined effort at yield discovery if not price discovery as a group of corn experts and journalists journeyed from Ohio to Iowa in August, sampling corn all the way. Following reams of reports, the conclusion of one of my favorite ag journalists, Pam Smith, on August 26, was: “All I can say is that it is too soon to predict yields.”
Maybe just sitting here on my deck and watching the corn grow across the road is as a good a way as any to achieve “price discovery.” Sure is a lot cheaper.