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A Comprehensive Evaluation of USDA Cotton Forecasts

Author

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  • Isengildina-Massa, Olga
  • MacDonald, Stephen
  • Xie, Ran

Abstract

This study evaluates all USDA cotton supply and demand estimates for the United States and China (including unpublished price forecasts) from 1985/86 through 2009/10 for accuracy and efficiency. Results reveal that at every stage of the forecasting cycle forecast smoothing was the most widespread and persistent type of inefficiency observed in most U.S. variables. Correlation with past errors indicated the tendency to repeat past errors in most cases. Tendency to overestimate growth was also found. Bias was uncommon and limited to several cases of overestimation of China’s exports and U.S. price and underestimation of China’s domestic use. While forecasts of China’s imports and endings stocks improved, U.S. price and ending stock forecast errors became larger toward the end of the study period.

Suggested Citation

  • Isengildina-Massa, Olga & MacDonald, Stephen & Xie, Ran, 2012. "A Comprehensive Evaluation of USDA Cotton Forecasts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), April.
  • Handle: RePEc:ags:jlaare:122314
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    File URL: http://purl.umn.edu/122314
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    References listed on IDEAS

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    1. Scott H. Irwin & Darrel L. Good, 2004. "Evaluation of USDA Interval Forecasts of Corn and Soybean Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 990-1004.
    2. T. Randall Fortenbery & Daniel A. Sumner, 1993. "The effects of USDA reports in futures and options markets," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 13(2), pages 157-173, April.
    3. Isengildina-Massa, Olga & MacDonald, Stephen, 2009. "U.S. Cotton Prices and the World Cotton Market: Forecasting and Structural Change," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49324, Agricultural and Applied Economics Association.
    4. Isengildina-Massa, Olga & Irwin, Scott H. & Good, Darrel L. & Gomez, Jennifer K., 2008. "The Impact of Situation and Outlook Information in Corn and Soybean Futures Markets: Evidence from WASDE Reports," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(01), pages 89-103, April.
    5. Schnader, M H & Stekler, H O, 1990. "Evaluating Predictions of Change," The Journal of Business, University of Chicago Press, vol. 63(1), pages 99-107, January.
    6. G. Gunnelson & W. D. Dobson & S. Pamperin, 1972. "Analysis of the Accuracy of USDA Crop Forecasts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(4_Part_1), pages 639-645.
    7. Falk, Barry L. & Orazem, Peter, 1989. "Measuring Market Responses to Error-Ridden Government Announcements," Staff General Research Papers Archive 11096, Iowa State University, Department of Economics.
    8. Sanders, Dwight R. & Manfredo, Mark R., 2002. "Usda Production Forecasts For Pork, Beef, And Broilers: An Evaluation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
    9. Christopher S. McIntosh & Jeffrey H. Dorfman, 1992. "Qualitative Forecast Evaluation: A Comparison of Two Performance Measures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 209-214.
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    Cited by:

    1. Bahram Sanginabadi, 2018. "USDA Forecasts: A meta-analysis study," Papers 1801.06575, arXiv.org.
    2. MacDonald, Stephen & Isengildina-Massa, Olga, 2012. "Information Rigidity and Correcting Inefficiency in USDA’s Commodity Forecasts," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124890, Agricultural and Applied Economics Association.

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