Lanworth’s forecast methodologies–which combine real time satellite imagery, advanced biophysical simulation models, and extensive ground sampling and surveys are wholly unlike any others used in the industry today. An over-arching commitment to the scientific method governs Lanworth’s research process and methodologies and informs our estimates.
Lanworth, Inc. 2010 ©
Based on multiple lines of evidence from our various methodologies, and against all market expectations for record production in 2009, Lanworth continued to test its understanding of 2009 production levels and found strong evidence for lower productivity of the 2009/2010 corn and soybean crops than NASS had reported.
Our continued efforts to test our understanding of lower production in 2009 lead Lanworth to obtain corn and soybean export quality data provided by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA). Analysis indicated mean test weight of exported corn from October 2009-June 2010 was lowest since 1996/97 (3% below 10-year mean). From September 2009 to June 2010, mean test weight of soybean is lowest on record (1% below 10-year mean) and moisture content of exported soybean is highest since 1996/97 (1% above 10-year mean). GIPSA data aligned with previous Lanworth estimates of 2009 production.
Low test weight (especially for corn) and high moisture content (especially for soybeans) means that greater volume (more bushels) than usual are required to produce outputs such as livestock feed, ethanol, soybean meal and oil. NASS and WAOB, however, assume constant values for the mass of corn and soybean bushels and/or the products derived from them. When test weights are low and moisture is high, this will result in an underestimate of the actual use of corn and soybean bushels and an increase in unexplained disappearance.
Analysis of GISPA data was one of the many independent data source that allowed Lanworth to inform clients of the risk posed by the lower test weights and high moisture content characteristic of 2009 production, and which could emerge as a feature of the stock balance sheet. The recent drawdown in grain stocks due to poor quality was a market risk Lanworth observed through its multiple methodologies as early as July of 2009.
