Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-23T08:55:28.481Z Has data issue: false hasContentIssue false
  • English
  • Français

Do Big Crops Get Bigger and Small Crops Get Smaller? Further Evidence on Smoothing in U.S. Department of Agriculture Forecasts

Published online by Cambridge University Press:  26 January 2015

Olga Isengildina ,
Scott H. Irwin  and
Darrel L. Good
Olga Isengildina
Affiliation:
Department of Economics, University of Texas at Arlington, Arlington, Texas
Scott H. Irwin
Affiliation:
Agricultural Marketing, University of Illinois at Urbana-Champaign, Champaign, Illinois
Darrel L. Good
Affiliation:
Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Champaign, Illinois
Get access Rights & Permissions [Opens in a new window]

Extract

This study sought to determine whether monthly revisions of U.S. Department of Agriculture current-year corn and soybean yield forecasts are correlated and whether this correlation is associated with crop size. An ex-ante measure of crop size based on percent deviation of the current estimate from out-of-sample trend is used in efficiency tests based on the Nordhaus framework for fixed-event forecasts. Results show that available information about crop size is generally efficiently incorporated in these forecasts. Thus, although this pattern may appear obvious to market analysts in hindsight, it is largely based on new information and hence difficult to anticipate.

Keywords

corncrop size efficiencyfixed-event forecastsindependencerevisionssmoothingsoybeansyield forecastsQ10Q13E37
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 45 , Issue 1 , February 2013 , pp. 95 - 107
Copyright
Copyright © Southern Agricultural Economics Association 2013

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bailey, D.V., and Brorsen, B.W.. “Trends in the Accuracy of USDA Production Forecasts for Beef and Pork.” Journal of Agricultural and Resource Economics 23(1998):15–526.Google Scholar
Baur, R.F., and Orazem, P.F.. “The Rationality and Price Effects of USDA Forecasts of Oranges.” The Journal of Finance 49(1994):681–96.10.1111/j.1540-6261.1994.tb05157.xGoogle Scholar
Colling, PL., and Irwin, S.H.. “The Reaction of Live Hog Futures Prices to USDA Hogs and Pigs Reports.” American Journal of Agricultural Economics 71(1990):84–94.Google Scholar
Fortenbery, T.R., and Sumner, D.A.. “The Effects of USDA Reports in Futures and Options Markets.” Journal of Futures Markets 13(1993):157–73.10.1002/fut.3990130204Google Scholar
Good, D., and Irwin, S.. “USDA Corn and Soybean Acreage Estimates and Yield Forecasts: Dispelling Myths and Misunderstandings.” Marketing and Outlook Brief 2011-02, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 2011. Internet site: http://www.farmdoc.illinois.edu/marketing/mobr/mobr_11-02/mobr_11-02.pdf (Accessed May 5, 2011).Google Scholar
Good, D.L., and Irwin, S.H.. “Understanding USDA Corn and Soybean Production Forecasts: An Overview of Methods, Performance and Market Impact over 1970-2005.” AgMAS Project Research Report 2006-01, Dept. Agr. Cons. Econ., University of Illinois, February 2006. Internet site: http://www.farmdoc.uiuc.edu/agmas/reports/06_01/AgM AS06_01.pdf (Accessed January 10, 2010).Google Scholar
Gunnelson, G., Dobson, W., and Pamperin, S.. “Analysis of the Accuracy of USDA Crop Forecasts.” American Journal of Agricultural Economics 54(1972):639–45.10.2307/1238541Google Scholar
Hill, H.S.J., and Mjelde, J.W.. “Challenges and Opportunities Provided by Seasonal Climate Forecasts: A Literature Review.” Journal of Agricultural and Applied Economics 34(2002):603–32.Google Scholar
Isengildina, O., Irwin, S.H., and Good, D.L.. “Are Revisions to USDA Production Forecasts Smoothed?” American Journal of Agricultural Economics 88(2006):1091–104.10.1111/j.1467-8276.2006.00918.xGoogle Scholar
McKenzie, A.M. “Pre-Harvest Price Expectations for Corn: The Information Content of USDA Reports and New Crop Futures.” American Journal of Agricultural Economics 90(2008):351–66.10.1111/j.1467-8276.2007.01117.xGoogle Scholar
Nordhaus, W.D. “Forecasting Efficiency: Concepts and Applications.” The Review of Economics and Statistics 69(1987):667–74.10.2307/1935962Google Scholar
Sanders, D.R., and Manfredo, M.R.. “USDA Production Forecasts for Pork, Beef, and Broilers: An Evaluation.” Journal of Agricultural and Resource Economics 27(2002):114–28.Google Scholar
Sumner, D.A., and Mueller, R.A.E.. “Are Harvest Forecasts News? USDA Announcements and Futures Market Reactions.” American Journal of Agricultural Economics 71(1989):127–34.Google Scholar
Tannura, M.A., Irwin, S.H., and Good, D.L.. “Weather, Technology, and Corn and Soybean Yields in the U.S. Corn Belt.” Marketing and Outlook Research Report 2008-01, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 2008. Internet site: www.farmdoc.illinois.edu/marketing/morr/morr_08-01/morr_08-01.pdf (Accessed February 3, 2010).Google Scholar
Taylor, S.E. “Climate Trends and Agricultural Management.” Working Paper, Department of Agronomy, Iowa State University, 2003. Internet site: http://ag.arizona.edu/ANS/swnmc/papers/2003/taylor.pdf (Accessed January 23, 2010).Google Scholar
USDA/NASS. The Yield Forecasting Program of NASS. National Agricultural Statistics Service U.S. Department of Agriculture, Staff Report SMB 06-01, May 2006. Internet site: www.nass.usda.gov/Education_and_Outreach/Understanding_Statistics/yldfrcst2006.pdf (Accessed January 29, 2010).Google Scholar
Vogel, F.A., and Bange, G.A.. Understanding USDA Crop Forecasts. National Agricultural Statistics Service and World Agricultural Outlook Board U.S. Department of Agriculture, Miscellaneous Publication, No. 1554, March 1999. Internet site: www.nass.usda.gov/Education_and_Outreach/Understanding_Statistics/pub1554.pdf (Accessed February 5, 2010).Google Scholar
Wisner, R.N., Blue, E.N., and Baldwin, E.D.. “Pre-Harvest Marketing Strategies Increase Net Returns for Corn and Soybean Growers.” Review of Agricultural Economics 20(1998):288–307.Google Scholar