To find the area of a circle, we can use the formula:
\[ \text{Area} = \pi r^2 \]
where \( r \) is the radius of the circle. The radius \( r \) is half of the diameter. Given a diameter of 16 yards, we can calculate the radius as follows:
\[ r = \frac{\text{diameter}}{2} = \frac{16 \text{ yards}}{2} = 8 \text{ yards} \]
Now, we can use this radius to find the area:
\[ \text{Area} = \pi r^2 = 3.14 \times (8 \text{ yards})^2 \]
Calculating \( (8 \text{ yards})^2 \):
\[ (8 \text{ yards})^2 = 64 \text{ square yards} \]
Now substituting back into the area formula:
\[ \text{Area} = 3.14 \times 64 \text{ square yards} = 200.96 \text{ square yards} \]
Thus, the area of the circle is approximately:
\[ \boxed{200.96} \text{ square yards} \]