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Joint Evaluation of the System of USDA's Farm Income Forecasts

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  • Olga Isengildina‐Massa
  • Berna Karali
  • Todd H. Kuethe
  • Ani L. Katchova

Abstract

This study evaluates a system of USDA's Net Cash Income forecasts, released as part of the farm sector's income statement, which includes crop receipts, livestock receipts, government payments, farm‐related income, and expenses from 1986 to 2017. We examine these forecasts jointly for bias, accuracy, efficiency, and compositional consistency. Our findings demonstrate that underestimation in early Net Cash Income forecasts stems from underestimation in crop and livestock receipts as well as expenses forecasts. While most components except government payments contribute to the improvement in 12‐month‐ahead forecasts, improvements in 9‐month‐out forecasts are mostly due to crop receipts and expenses forecasts, and government payment forecasts were a main source of improvement in 6‐month‐ahead forecasts. Despite the observed biases and inefficiencies, these forecasts are compositionally consistent with the actual outcomes and represent realistic projections of the farm sector accounts.

Suggested Citation

  • Olga Isengildina‐Massa & Berna Karali & Todd H. Kuethe & Ani L. Katchova, 2021. "Joint Evaluation of the System of USDA's Farm Income Forecasts," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 1140-1160, September.
    • Handle: RePEc:wly:apecpp:v:43:y:2021:i:3:p:1140-1160
    DOI: 10.1002/aepp.13064
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    References listed on IDEAS

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    Cited by:

    1. Regmi, Hari & Kuethe, Todd H. & Foster, Kenneth A., 2022. "Evaluation of USDA's Agricultural Exports Projections," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322363, Agricultural and Applied Economics Association.
    2. Giri, Anil K & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, 2022. "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," Administrative Publications 327332, United States Department of Agriculture, Economic Research Service.
    3. Giri, Anil K. & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, 2022. "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," USDA Miscellaneous 327371, United States Department of Agriculture.

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