High Risk Production Years

There is some indication that years of high risk for crop production tend to cluster. During the past 100 years there were 17 serious (widespread) droughts in the U.S. Com Belt. It is not uncommon to have 12 to 18 years between major drought events. During the past 200 years, the drought cycle has averaged about 18.5 years, but it is not clear that there is a primary weather cycle of this length. It may be that the average results from the periodic coming into phase of more fundamental climate cycles associated with events such as the Pacific Decadal Oscillation (PDO) and the El Nino Southern Oscillation (ENSO). Drought is a major production risk and perhaps the least manageable. Although pest risk also depends upon weather, management options are usually available, at least with some planning. The producer should evaluate the level of production risk and the potential marketing risk associated with the price volatility. Grain price is influenced by deviations from expected crop yields across the Com Belt and elsewhere in the world. There is some indication that risk during the next 5 years will be approximately double that of the past decade