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Senior Advisor

USDA Projections

Here is information from the Q&A FAQ of the USDA projections.

 

"What are long-term baseline projections?

Each year, USDA makes 10-year projections of the food and agriculture sector. The commodity projections are used to forecast farm program costs and to prepare the President's budget. The projections reflect a number of assumptions that are spelled out in a baseline scenario and cover agricultural commodities, agricultural trade, and aggregate indicators of the U.S. farm sector such as farm income.

When are the projections released?

The Departmental baseline report is released in February each year.

What is the difference between a baseline projection and a forecast?

Baseline projections focus on longer term underlying trends based on a set of assumptions, while forecasts focus more on predicting actual outcome within a shorter time frame (1 or 2 years). A USDA "baseline" projection represents one plausible scenario for the next 10 years. These projections assume no shocks, but instead are based on specific assumptions for the macroeconomy, policy, weather, and international developments. Such conditioning assumptions are usually designed to provide a neutral backdrop for the projections to allow the analyses to focus on key long-term underlying factors. For example, macroeconomic assumptions for baseline projections are usually "smoothed," without recessions or economic booms, and agricultural policies are typically assumed to remain unchanged from current law. In contrast, forecasts incorporate additional information that departs from the neutral assumptions of baseline projections and are designed to lead to predictions of actual outcomes.

What are some applications of the baseline?

The commodity projections in the baseline are used to forecast farm program costs and to prepare the President's budget. As a neutral policy scenario, the baseline provides a useful basis of comparison for analysis of alternative polices and market developments. Examples of baseline applications include the following:
evaluating the effects of changes in the renewal fuel standard and ethanol production on U.S. agricultural commodity markets and farm income; and
analyzing the relationship of U.S. agricultural trade to the economies of developing countries, and comparing these countries' income changes and exchange rate movements with the baseline scenario."

 

Here is a longer discussion of the background of the projections:

http://www.ers.usda.gov/ersDownloadHandler.ashx?file=/media/1279427/oce141a.pdf

 

Importantly, "The projections in this report were prepared during October through December 2013 and, thus, do not reflect the subsequently enacted Agricultural Act of 2014."

 

It is patently obvious that journalists who call this 10 year projection a prediction have simply not read the report and thus are incompetent to report on it.

 

One could make the case that the periodic short-term forecasts are more predictifve in nature, but even there the term "prediction" is a stronger word than USDA would use to describe the reports.

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4 Replies
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Veteran Advisor

Re: USDA Projections

my projection is they're wasting our $$$ with this...also, it is blatantly arrogant - can't be fairly compared with other budget or dept projections.

 

my 10 yr projection is there will be production and consumption all over the world, which is not in a "controled" environment, which the USDA's baselines are set in-only God gets to play God!

 

theoretical-world or hypothetical-world or if we have a decade like the 90's ... REALLY???

 

potato-patata...tomatoe-tamata- p-this, p-that is completely irrelevant..strike this word descrepancy from the record your honor, it has no relevance to this debate.....actually, it has a deceptive quality with intent to confuse and confound which has CLEARLY BEEN THE RESULT -- which makes it more apalling.

 

THE COURT FINDS THIS SO AND the mkt participants should completely recoop all the tax funds which were used in this circus.

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Senior Contributor

Re: USDA Projections

    Or 1930s dust bowl!

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Senior Advisor

Re: USDA Projections

Government has to have a baseline upon which to build budgets.  It is not the fault of the USDA that some ag journalists who don't know what they're doing and don't even read the report change the report focus and then use that misinformation to give everyone the impression the report is something it is not and was never intended to be.

 

The lesson for farmers who want to market is to actually read the report instead of relying on what someone else wrote about it.

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Contributor

Re: USDA Projections

From what I've read on the USDA projections, they do not account for climate change and self-reinforcing feedbacks.  We are not at all ready for what's already here let alone what they are projecting.

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