By: Chris Bruynis, Assistant Professor & Extension Educator, Ross County

Farmers that were able to reduce crop insurance premiums by using the Pilot Biotechnology Endorsement (BE) approved by the Federal Crop Insurance Corporation Board of Directors (FCIC Board) starting with the 2008 crop year (CY), will no longer be able to beginning with CY 2012. The Pilot BE has provided a premium rate reduction to eligible producers that plant certain qualifying corn hybrids. After careful consideration, and in consultation with the pilot submitters, the FCIC Board has concluded the Pilot BE will terminate in the interest of program simplification.

However, RMA will consider an appropriate reduction in the underlying base premium rates for corn in the existing pilot area beginning with the 2012 crop year. Ohio was one of the states in the Pilot BE Program.

The Risk Management Agency (RMA) and the Farm Service Agency (FSA) have established 15 common acreage reporting dates for producers participating in RMA and FSA programs. Before the streamlining, RMA had 54 acreage reporting dates for 122 crops, and FSA had 17 dates for 273 crops.  In Ohio, this change means producers will now have four acreage reporting dates instead of five.

Beginning in 2012 burley tobacco, spring cabbage (planted 3/15-5/31), corn, grain sorghum, hybrid corn seed, spring oats, popcorn, potatoes, soybeans, tomatoes, and any other crops not listed elsewhere will have a July 15 acreage reporting date. Summer cabbage (planted 6/01-7/20) will have an August 15 acreage reporting date.

Beginning in 2013 January 15 will be the acreage reporting date for apples and grapes. December 15 will be the acreage reporting date for fall barley, fall wheat, and any other fall seeded small grain.

By: Carl Zulauf, Professor, and Evan Hertzog, Metro High School Junior
Department of Agricultural, Environmental and Development Economics

Introduction: In a previous article, we compared the trend in U.S. average yield per harvested acre for the 1940-1995 and 1996-2011 periods. The year 1996 was the first year that biotech varieties of crops were commercially adopted in the U.S. The analysis included 14 crops, 3 biotech crops (corn, cotton, and soybeans) and 11 crops for which adoption of biotech varieties is limited. This article specifically examines the deviation of average U.S. yield from its trend-line yield. The objective is to provide information concerning the commonly-expressed argument that biotechnology has reduced yield variability.

Analytical Procedures: The data for this analysis are from the U.S. Department of Agriculture, National Agricultural Statistics Service, accessed at http://www.nass.usda.gov/Data_and_Statistics/) during November 2011. The observation period is from 1940 through 2011, with 1940 being the approximate year that average yield began to increase for most U.S. crops.

We will use corn yields since 1995 to illustrate the calculation of yield variation used in this analysis. The yearly corn yield, along with the linear trend line, is presented in Figure 1. We calculated the percent deviation of the actual yield from the estimated trend-line yield for each year. For example, U.S. average corn yield was 160 bushels per harvested acre in 2004. The linear trend yield estimate for 2004 was 144. The percent deviation of yield from its trend yield estimate is +11% ((160/144) -1). In other words, average U.S. yield in 2004 was 11% greater than the trend yield for 2004.

This measure of variation takes into account that yield has trended up over time. A one bushel variation in yield has a different meaning when yield is 150 bushels than when it is 50 bushels. The last step in the procedures was to calculate the standard deviation of the percent variations from trend-line yield during the observation period. Standard deviation is a commonly-used measure of variation.

Discussion: For all 14 crops, the variation from trend-line yield is lower during the recent 1996-2011 period than during the earlier 1940-1955 period (see Table 1 below). The average decline in yield variation was -45%, with a range from -14% (sugar beets) to -67% (peanuts). Moreover, for 10 of the 14 crops, yield variation was smaller in the more recent period with 95% statistical confidence (see last column of Table 1). The four exceptions were barley, soybeans, sugar beets, and wheat. Last, the average decline for the 3 biotech crops was -43%, compared with -45% for the 11 non-biotech crops.

Implications: A decline in yield variability is a universal characteristic of the U.S. crops included in this study. It is not just a characteristic of the biotech crops. Moreover, little difference appears to exist in the size of the decline in yield variability across biotech and non-biotech crops.

While this study cannot preclude biotechnology as an explanation for the decline in yield variability observed for corn, cotton, and soybeans; it suggests more universal factors are likely occurring. One such factor could be that both biotech and traditional breeding methods have been equally successful at creating varieties that reduce yield variation. A second such factor could be that weather was more favorable across the various U.S. production regions during 1996-2011 than 1940-1995.

To the extent that the decline in crop yield variability is permanent and not transitory, it generates benefits for consumers of crops. A more reliable supply reduces the size of stocks that need to be carried to assure an adequate supply of food before the next harvest, thus reducing the cost of food. A more reliable supply also enhances the ability to expand non-food uses of crops. Non-food uses, such as energy production, require large capital investments. Large capital investments are more economically viable when utilized at close to full capacity. A stable input supply increases the odds that a plant can operate closer to full capacity.

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by: Carl Zulauf, Professor, and Evan Hertzog, Metro High School Junior
Department of Agricultural, Environmental and Development Economics

Introduction: Biotechnology varieties first became available for commercial use in the U.S. in 1996. By 2011, they accounted for 88%, 90%, and 94% of the acres planted to corn, upland cotton, and soybeans, respectively (U.S. Department of Agriculture (USDA), National Agricultural Statistics Service (NASS), Acreage, http://www.nass.usda.gov/Publications/index.asp, 6/30/11). For other crops, adoption of biotech varieties has been limited or nonexistent. Given that 15 years have passed, this article compares the trend in U.S. average yield since 1995 with the trend that existed from 1940 through 1995, a period that predates commercial biotech varieties. The year 1940 approximates when the average yield of most U.S. crops began increasing, due in part to traditional breeding methods.

Analytical Methods: Yields per harvested acre were obtained for corn, all cotton, soybeans, and 11 crops for which adoption of biotechnology varieties is limited or non-existent. Source of the data is USDA, NASS, http://www.nass.usda.gov/Data_and_Statistics/, 11/2011. Linear yield trends were estimated for 1940-1995 and 1996-2011 using regression analysis. The estimated yield trends are tested statistically to determine if they exceed zero at the 95% confidence level. Also, the 1996-2011 yield trend is compared against the upper value of the 95% confidence range around the pre-1996 trend. This test provides an indication of whether the trend is statistically higher since 1995.

Findings: The yield trend is estimated in the crop’s quantity unit per harvested acre. For example, the estimated yield trends for corn are 1.86 bushels per harvested acre for the earlier 1940-1995 period and 2.02 bushels per harvested acre for the later 1996-2011 period (see Table 1 below).

For 13 of the 14 crops, the yield trend estimated for 1940-1995 exceeds zero with 95% statistical confidence. The exception is sugar cane. The time-trend R2 exceeds 0.78 for each of the 13 crops, implying that the time trend explains at least 78% of the variation in yield over time. This is a high degree of explanation for a single variable. For 1996-2011, 9 of the 14 yield trends exceed zero with 95% statistical confidence. A lower number is expected because the number of observation years is smaller. For the same reason, it is not surprising that R2 also is lower.

For only 7 of the crops analyzed in this study is the estimated yield trend higher during 1996-2011 than 1940-1995. The 7 crops are barley, corn, cotton, peanuts, rice, soybeans and sugar beets. For each of these 7 crops, the 1996-2011 yield trend exceeds the high end of the 95% confidence range for the 1940-1995 yield trend (see Table 2 below). This finding suggests that, for these 7 crops, the 1996-2011 yield trend exceeds the 1940-1995 yield trend with 95% statistical confidence.

Implications: This analysis finds that, while the yield trend increased for all 3 biotech crops after 1996, the yield trend increased for less than half of the crops (4 of 11) for which biotech varieties are of limited importance. This finding does not prove that biotechnology is the reason for the higher yield trend for corn, cotton, and soybeans. It only reveals that the evidence on linear yield trends is not inconsistent with such a conclusion.
Over 10 years, the higher yield trend translates into a harvest yield that is 1.6 bushels, 0.6 bushels, and 69.1 pounds higher for corn, soybeans, and cotton, respectively. This addition to yield is 1.0%, 1.4%, and 7.9% of the highest harvest yield observed for corn, soybeans, and cotton, respectively. Thus, for corn and soybeans, the increase in yield trend since 1995 is not large.

These implications are subject to change with more years of data. Also, the analysis does not address what the yield trend would have been for corn, cotton, and soybeans if biotech varieties had not been introduced.
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