Projects, Not Predicts

[Jim Meade / Iowa City]

"USDA's long term projections through 2023, released Thursday, show national average U.S. corn prices falling to $3.30 a bushel in the 2015-16 marketing year, before beginning a slow rebound that finishes out the decade at $4.20 a bushel.

The projection for the current 2013-14 marketing year for last year's crop is less bearish, with the farm price for corn estimated at $4.50 a bushel."

A projection is an extension of a current trend.  A prediction is a conclusion that something will happen.  The USDA did not predict anything.  They said that if things continue according to the current facts and estimates, $3.30 is logical in 15-16.  Lots of time between now and then to make marketing decisions to make sure that 3.30 never affects your own farm.

[Jim Meade / Iowa City]

"Some traders dismissed the report because it's "way overplayed" and isn't based on a scientific survey, said Arlan Suderman, an analyst at brokerage Water Street Solutions."

But, what do traders have to do wtih hedgers?  Usually, not all that much in the long run.

[roarintiger1]

Anything that results in fantasy numbers is just a guess.  Arlan Suderman is a wise man.

[Jim Meade / Iowa City]

Your problem is you are arbitrarilty chaninging the definition of what was said.  That will result in an incorrect appreciation for what the numbers mean.  That will lead you to false conclusions about what is likely to happen.

[roarintiger1]

Good one......I'll keep your explanation handy for the next time that I describe the USDA predictions.  Thanks!

I guess we will just have to agree to disagree.......isn't this a great country?

[Farmerjoe79]

Jim can I buy you corn for next year for 3.30. I will take the risk:)

[centralillinois]

If corn was 3.30 a bushel and gas was 3.30 a gallon wouldn't the ethanol plants be running the wheels off the facilities?  Have we ever seen a 1 to 1 ratio like this? 

[sw363535]

A projection is an extension of a current trend.  A prediction is a conclusion that something will happen.  The USDA did not predict anything.  They said that if things continue according to the current facts and estimates, $3.30 is logical in 15-16.  Lots of time between now and then to make marketing decisions to make sure that 3.30 never affects your own farm.

The person who make that statement should not be be criticizing anyone elses use of language.  Talk about splitting trivial hairs........

[Jim Meade / Iowa City]

Well, I made that statement and I'll happily criticize anyone else who thinks that words don't have meanings.   The people who write the reports are very conscious of the meaning of the words and we should be, too.   Turning a projecting into a prediction is not only inaccurate, it's silily.  Worse, it's a sure way to lose money because anyone who does that will focus on the wrong things and likely make the wrong decisions.

[sw363535]

so a prediction is not a projection? and one deals with trends and the other is not based on previous trends.

Seems to me they are both so loaded with supposition they are nearly worthless.  Especially when you look at the track record of either one.  Look back a few years and see if you can find a P. or a P. that shows the markets and production of 2012.  Or find a pro or a pre from 10 years back that shows the market effects of government policies generated by the financial wreck of 2008-9.

The accuracy of the words are not going to make the projections/predictions any more accurate.  They are still based on parameters that have no basis on the realities of the future. 

Usda cannot even predict what government policies will be 8 years out.  Prejection must be something like playing solitare on slow days.  It is just very expensive waisted time.

What this is probably most about is the continued governmental denial of inflation.  Or the dream that the dollar will bounce back.