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Economist says USDA’s yield forecasting not perfect, but a good tool
With the next USDA supply and demand report coming this week, an agricultural economist says those estimates can still have errors.
David Widmar of Agricultural Economic Insights says, “The lesson here that’s really important to take away is that we get really hyperfocused on half a bushel or a bushel movements in the corn, and we sometimes need to step back and realize, okay, it’s August. How much do we really know?”
Widmar tells Brownfield the size of the crop becomes clearer late in the season and forecasting errors shrink, but it’s far from perfect. “The storms in Iowa and the dryness in parts of the corn belt are impacting the crop as it finishes, so there’s still growing season on the table.”
He says since 2000, the August corn supply estimate was off by plus-or-minus 10 bushels per acre twice, and five bushels per acre six times. Widmar says USDA’s November corn estimate misses the final yield by more than two bushels per acre about 25% of the time and for soybeans, significant errors are common through August.
Widmar says like any tool in a farmer’s toolbox, knowing how to use the tools is key. “With these USDA forecasts, we have to be really good consumers of these. If you look at the data, if you look at the charts, these forecasts move us closer to accuracy, and I think that is the goal.”
USDA’s final corn and soybean production reports come out in January, and those occasionally get revised, too.
Widmar’s full report is available through his website.
