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Senior Advisor

USDA Corn Yield Forecasting Methodology

Here is a very intriquing article from the University of Illinois trying to look behind the veil of NASS corn yield methodology.

 

You'll be happy to know the article discusses bias in the system, but unhappy that it doesn't use "prediction".  Can't win them all.  And, you are free to assign your own reasons for the bias, including influences not addressed in the article, such as politics.

 

http://farmdocdaily.illinois.edu/2016/08/opening-up-the-black-box-more-usda-corn-yield.html

 

"Implications

The Agricultural Statistical Board (ASB) of the National Agricultural Statistics Service (NASS), is responsible for determining the official published corn yield estimates of the USDA. While there is considerable information available about the survey methodology used by NASS to generate yield indications, until recently, very little information has been publically available about the nature of the corn yield indications, the non-survey information, if any, used by the ASB to supplement the survey indications, or how the ASB reaches a collective consensus. Several publications have appeared in the scientific literature during the last several years that help open up the ASB "black box." These publications present for the first time historical data on the separate Agricultural Yield Survey (AYS) and the Objective Yield Survey (OYS) corn yield indications and the results are striking. The upward bias in the OYS corn yield indications, regardless of the release month, varies from around 10 to 15 bushels per acre, while the downward bias in the AYS in August ranges from about 10 to 20 bushels, and then generally declines in September and October and is usually, but not always, fairly small in November. Given the level and variability of the bias in AYS and OYS yield indications, it is sensible for the ASB to seek out additional non-survey information when generating published yield estimates. The recent publications indicate that the ASB incorporates a variety of auxiliary information, including trend yields, planting progress, July temperature and precipitation, crop condition ratings, and satellite imagery data. Unfortunately, we still don't have any information about the weights placed on this information in ASB deliberations. While it is important to better understand all aspects of the NASS corn yield forecasting methodology, and ASB procedures in particular, in the end what matters is the accuracy of the final published estimates. On that score, the evidence suggests USDA corn yield forecasts are still hard to beat."

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8 Replies
Honored Advisor

Re: USDA Corn Yield Forecasting Methodology

While there is considerable information available about the survey methodology used by NASS to generate yield indications, until recently, very little information has been publically available about the nature of the corn yield indications..........

 

How ignorant is that statement?  read it ... it is a joke for a stand up commedian.    Illinois u should have a better grip on the subject before copying directly from usda...

 

Will we ever wake up and realize how far we have moved away from knowing who or where we are, and why we are doing what we do.  NASS originated as a projection gathering activity for the Congress to assess the cost of various parts of the annual budget.  If anything it is an outlier figure(there I used a trendy word). (but read the rest of it.... it's clear I am not an ag journalist.)

 

The final statement----" in the end what matters is the accuracy of the final published estimates. On that score, the evidence suggests USDA corn yield forecasts are still hard to beat."---- makes it obvious the University and usda have no idea why the early yield "prognostications" became an annual event or what the actual yields end up to be...  It is just easier to declare the predictions fact.

But it is not important how accurate and we will never know....... so why do those involved get so defensive when the obvious Bias and creative modeling gets questioned???   Simple .... ever since some congresswoman from california stood up and said "We can run the country on a credit card", and the President said right on sweety, there has been little need to create accurate budgeting data early in the year.  We been spending whatever it takes without a care for the final cost...no accountability...

So for the usda there is a strong need for job justification from the secretary of Ag to the local fsa office we been panicing to prove our importance to this country.  Even though Uncle Bill gave usda union protection when he sent union jobs to mexico & china, fact is a well oiled Mac computer and a web site will probably take over the whole department soon, freeing up the office personel to run the new grower production communes we will be clamoring to get a meager pay check from.

 

" in the end what matters is the accuracy of the final published estimates"----- Absolutely false..... not even the trade needs any thing accurate in those guesstoments.....Like seed, fertilizer, equipment and capital,, all the ingredients of production are so concentrated in the hands of a few that yield and price can be driven down at wil by those few entities buying the crop.  It is called local basis and a willing press that needs every advertising dollar...  But usda is so concerned about their own relevance that they fight for respectability in accuracy claims..  That is why they all talk with an enviromental slant these days, hoping to hold on to a job while their office positions are funded as temp positions instead of long term personel.

 

 

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Senior Advisor

Re: USDA Corn Yield Forecasting Methodology

Is it accurate to assume from the quotes you made in your message that you only read the synopsis posted and did not read the article cited?  I posted the synopsis as a teaser to get people interested enough to read the entire article, not as as a summary of every point made in the story.  From observing similar posts over the years, the general reaction is to simply read the outtakes and not read the basic article, but maybe on this forum more people do the in-depth research.

 

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Honored Advisor

Re: USDA Corn Yield Forecasting Methodology

Jim I read both....

But I assumed the synopsis is the conclusion the university reached from the article... even though it covers more details and some of what I added.  It is a better article than your entry reflects it to be.

 

And I should have said that

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Veteran Contributor

Re: USDA Corn Yield Forecasting Methodology

As far as predictions methodologies go, several models such as CROPGRO and APSIM are commonly used for (fairly accurate) yield predictions.  Adding in satellite imagery may increase prediction accuracy between the +/- 3% that APSIM, for one, can be expected to produce.  Weather data, historical yields, soil survey maps overlaid with satellite imagery, and disease modelling are likely all included in the USDA''s prediction model.

 

Side note: certain research groups, both private and public, have been developing "new and improved" methods for predicting crop performance in recent years.  Depending on the source of data to train their models, these predictions may be extremely accurate or extremely off-base with your farm (i.e. a corn yield prediction algorithm developed using I-state performance will FUBAR yield prediction in western KS)

 

Edit: I'll go ahead and predict national corn yields of 178 bu/ac and soybeans at 53 bu/ac for 2017 Smiley Wink  Based off of the uber-scientific method of adding a few to the previous year

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Honored Advisor

Re: USDA Corn Yield Forecasting Methodology

No private firm needs to do their own predicting.   All they need to do is come close to whatever numbers the USDA puts out.  USDA puts out the only numbers that matter to the traders, whether it be just a prediction, a forecast, or a projection.   Whoever puts those numbers down on paper has the power to move our markets........whether they are accurate or not.

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Advisor

Re: USDA Corn Yield Forecasting Methodology

It is an interesting conversation in its own right.

 

And largely irrelevant in terms of marketing. I suppose it may swing some insurance dollars in terms of timing of lows but beyond that the market and trade is eventually going to hone in on the numbers. In precise terms it tends to take a year or more.

 

If there's somebody who really got it wrong this year it was NOAA and their long term forecasts in late May early June.

 

But anybody thinking that a bullish forecast has to be right because it aligns with their hopes or fears is likely to be disappointed sometimes.

 

There's a reason why the pros tend to lighten positions ahead of reports.

 

Right now it is a hot wet world and they may even come home to roost yet, like in Argentina. But it isn't a prospect that I'd bet heavily on. Nor would I bet the entire ranch that it won't.

 

 

 

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Senior Advisor

Re: USDA Corn Yield Forecasting Methodology

How and in what way did NOAA get the long range forecast right?

 

My recollection is is the forecast was for El Nino to end in May-July about when it did and for La Nina to start but not in time to have any major efffect on crop growing weather.  That's exactly what happened, it seems to me.

 

 In fact, that is a major reason I missed the soybean price hike.  My sense was that the high 9's was the best soybeans were going to get because the likely yield would be high.  In fact, that looks like it was right but the timing was wrong.  Not the first time I've been right on the outlook and got clobbered because I didn't give enough weight to the timing.

 

 

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Advisor

Re: USDA Corn Yield Forecasting Methodology

I said they got it wrong, specicially referring to the threatening 16-30 day forecasts issued early in the summer.*

 

That created a good selling opportunity.

 

Now we're just whining over missing the market.

 

* it was probably never even that threatening, just felt that way because the process of flipping funds from very short to very long added a lot of drama. Market action drives opinion, not the other way around.

 

BTW, and sorry to all,but the COT structure is part of the game that needs to be taken into the calculation. That's one of the two reasons I listed when I said I was nervous but wasn't going to make early, low sales. The other was simple seasonality.

 

Also in terms of things to file away, the price surge ended before July options expired- which in the absence of some urgent circumstances is not uncommon. That's not a conspiracy, it is just a symptom of how options work, and "we" were supposed to be happy to have another "tool."

 

When you get close to expiration following a big move there are profits to taken and there's cheap, short term insurance to trade against.

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