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The Golden Number for Illinois Agriculture

What is the golden number for Illinois agriculture? I ask this question every year to the students in my commodity price analysis class. It’s guaranteed to be on the final exam.

The golden number I have in mind is 4, as in 4 inches of precipitation in July. The attached chart shows trend deviations for the state average corn yield in Illinois versus total July precipitation over 1980-2021. Notice that when Illinois receives 4 or more inches of precip in July that the corn yield tends to be near or above trend. When July precip is less than 4 inches corn yield slides down the hill very fast. That is my argument for 4 inches as the golden number.

Also notice that July precip alone explains nearly half of the variation in corn trend yield deviations from year to year. No other precipitation or temperature variable comes close to the impact of July precip. This makes sense from a crop physiology standpoint. The corn plant is uniquely fruitful but it is vulnerable during its reproductive phase, which of course normally happens sometime in July.

Finally, I realize that saying 4 inches of precipitation in July is the golden number for Illinois agriculture gives short shrift to livestock producers. But even they are directly impacted by this through the feed market. Good July precip typically leads to good corn yields which helps hold down the price of corn, which in turn, helps hold down feed costs for livestock. #agriculture #students

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