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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
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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

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