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Evaluating the USDA’s Net Farm Income Forecast

Author

Listed:
  • Kuethe, Todd H.
  • Hubbs, Todd
  • Sanders, Dwight R.

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.

Suggested Citation

  • Kuethe, Todd H. & Hubbs, Todd & Sanders, Dwight R., 2018. "Evaluating the USDA’s Net Farm Income Forecast," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    • Handle: RePEc:ags:jlaare:276505
    DOI: 10.22004/ag.econ.276505
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    References listed on IDEAS

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    Cited by:

    1. Massa, Olga Isengildina & Karali, Berna & Kuethe, Todd & Katchova, Ani, 2019. "Sources of Errors In USDA’s Net Cash Income Forecasts," 2019 Conference, April 15-16, 2019, Minneapolis, Minnesota 309630, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

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