Evaluating the USDA's net farm income forecast

Todd H. Kuethe, Todd Hubbs, Dwight R. Sanders

Research output: Contribution to journalArticlepeer-review

Abstract

The USDA produces four forecasts of net farm income for each year; these forecasts are closely monitored by decision makers across the agricultural sector. However, little is known about the performance of these forecasts. Traditional forecast evaluation tests suggest that between 1975 and 2016, the long-horizon forecasts systematically under-predicted realized values. In addition, the shorter-horizon forecast revisions overreact to new information. The findings suggest that forecast users should adjust their expectations and that the USDA may want to consider other forecast approaches to supplement current procedures.

Original languageEnglish (US)
Pages (from-to)457-468
Number of pages12
JournalJournal of Agricultural and Resource Economics
Volume43
Issue number3
StatePublished - Sep 2018

Keywords

  • Fixed-event forecasts
  • Forecast evaluation
  • Net farm income

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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