Corn Production Shocks in 2012 and Beyond: Implications for Harvest Volatility
Chapter in NBER book The Economics of Food Price Volatility (2014), Jean-Paul Chavas, David Hummels, and Brian D. Wright (p. 59 - 81)
Corn prices increased sharply in the summer of 2012 due to expected production shortfalls in the United States, which produces roughly 40% of the world's corn. A heat wave in July adversely affected corn production. We extend earlier statistical models of county-level corn yields in the Eastern United States by allowing the effect of various weather measures to vary in a flexible manner over the growing season: Extreme heat is especially harmful around a third into the growing season. This is the time when the 2012 heat wave hit the Corn Belt. Our most flexible model predicts 2012 corn yields will be 23% below trend, which is close to the observed realization. While extreme heat was significantly above normal, climate change scenarios suggest that the 2012 outcomes will soon be the new normal.
This paper was revised on July 17, 2013Corn Production Shocks in 2012 and Beyond: Implications for Food Price Volatility, Steven T. Berry, Michael J. Roberts, Wolfram Schlenker
Commentary on this chapter: Comment, Derek Headey
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