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.
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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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