To find the area of a circle, you can use the formula:
\[ \text{Area} = \pi r^2 \]
where \( r \) is the radius of the circle. The radius is half of the diameter.
Given that the diameter is 16 yards, we can find the radius:
\[ r = \frac{16}{2} = 8 \text{ yards} \]
Now, plug the radius into the area formula using \( \pi \approx 3.14 \):
\[ \text{Area} = 3.14 \times (8)^2 \]
Calculating \( 8^2 \):
\[ 8^2 = 64 \]
Now, substitute that back into the area calculation:
\[ \text{Area} = 3.14 \times 64 \]
Calculating \( 3.14 \times 64 \):
\[ 3.14 \times 64 = 200.96 \]
Thus, the area of the circle is:
\[ \boxed{200.96} \text{ square yards} \]