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Senior Advisor

How Accurate Are USDA Yield Forecasts?

The University of Illinois says USDA is getting better and is pretty darned accurate.

 

http://farmdocdaily.illinois.edu/2014/08/usda-corn-yield-forecasts-better-or-worse.html

 

"Implications

Our analysis of USDA yield forecasts for corn over 1990-2013 did not reveal any evidence of bias in August, September, October, or November. There is compelling evidence that the accuracy of USDA corn yield forecasts has improved over time, particularly since 2011. It is especially interesting to note that USDA corn yield forecast errors in 2012 were extremely small, with the August forecast exactly equal to the final estimate. This performance was exceptional given the severe drought that occurred in the summer of 2012. What, if anything, do these results imply about the ongoing debate about the direction of USDA corn yield forecasts in remaining Crop Production reports during 2014? While it is, of course, true that longer-term trends in accuracy will not necessarily dominate in any particular year, an unusually large August forecast error this year (5 percent or more) would definitely be counter to the trend towards increasingly accurate USDA corn forecasts over time."

 

 

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Honored Advisor

Re: How Accurate Are USDA Yield Forecasts?

HOW ACCURATE WAS THE MARCH PREdICTION IN 2012????

 

August is not much of a "prediction"

 when the crop is nearly "finished".

 

Even in 2012 only the final after harvest predictions were close to accurate --4 or 5 months -------- After being wrong for the previous 6 months.

 

The last few drought years have shown the opposite of accuracy in prediction.  Rather a consistance to predict advancement in production in spite of actual conditions or climate.

 

I would agree they are consistant.   Doesn't it say something that U of Ill. excludes March to august from the discussion.  Precictions are pretty easy after harvest is begun or over.   It is called building the data to support the theory.

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Senior Advisor

Re: How Accurate Are USDA Yield Forecasts?

So what's the point?  The article was about August.  The value of the article is in helping a farmer decide what yields are likely to be so that he can make informed decision about marketing his grain.

 

If one wants to talk about planting forecasts there was plenty of information available to help one make informed marketing decisions then.  The conclusion of the analysts was based on the forecasts prices would go down.  Some sold quite a bit ahead with that in mind.

 

The point of the article was to help farmers deal with what is here and now, not what might have been.  

 

Based on the article, if one has grain unpriced it might be worthwhile to look for a marketing strategy to maximize income.  Maybe selling the carry if there is one.  Maybe selling on post harvest bounce. 

 

The idea that with a large crop one might do well to store and wait would seem to rely on demand coming back.  No doubt demand will come back a little as grain prices stay low.  Or, there could be political, economic or other reasons to give a bump up.  It might be good to have some idea of what prices are acceptable when there looks to be such a good supply.

 

I

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Honored Advisor

Re: How Accurate Are USDA Yield Forecasts?

I will take the article at its word.

 

quote from the study

 

"The purpose of this article is to examine trends in the accuracy of USDA corn yield forecasts in recent years in order to provide an additional perspective on the debate about the U.S. corn yield in 2014."

 

 

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Honored Advisor

Re: How Accurate Are USDA Yield Forecasts?

News flash:

 

Demand never left.

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