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Detecting the Sources of Information Rigidity: Analyzing Forecast Bias and Smoothing in USDA’s Soybean Forecasts

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  • MacDonald, Stephen
  • Ash, Mark

Abstract

USDA’s U.S. soybean ending stock forecasts are upwardly biased. To determine the source of this bias, we examine the revision characteristics of the ending stocks forecasts, and examine USDA’s forecasts of other U.S. soybean balance sheet variables and foreign soybean balance sheet variables. Bias in USDA’s soybean export forecasts is the most likely source of ending stock forecast bias. In turn, bias in the U.S. export forecasts has diverse sources, including bias in foreign trade estimates and late in the forecast cycle slow updating of the forecasts to reflect new information.

Suggested Citation

  • MacDonald, Stephen & Ash, Mark, 2016. "Detecting the Sources of Information Rigidity: Analyzing Forecast Bias and Smoothing in USDA’s Soybean Forecasts," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235349, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235349
    DOI: 10.22004/ag.econ.235349
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    File URL: https://ageconsearch.umn.edu/record/235349/files/AAEA_2016_WASDE_soy_fcst_05172016_2.pdf
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    References listed on IDEAS

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    1. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, September.
    2. 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(1), pages 89-103, April.
    3. repec:cup:jagaec:v:40:y:2008:i:1:p:89-103_6 is not listed on IDEAS
    4. MacDonald, Stephen, 1992. "The Accuracy of USDA's Export Forecasts," Staff Reports 278679, United States Department of Agriculture, Economic Research Service.
    5. Botto, Augusto C. & Isengildina, Olga & Irwin, Scott H. & Good, Darrel L., 2006. "Accuracy Trends and Sources of Forecast Errors in WASDE Balance Sheet Categories for Corn and Soybeans," 2006 Annual meeting, July 23-26, Long Beach, CA 21332, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Nordhaus, William D, 1987. "Forecasting Efficiency: Concepts and Applications," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 667-674, November.
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    Cited by:

    1. Goyal, Raghav & Adjemian, Michael K. & Glauber, Joseph & Meyer, Seth, 2023. "Decomposing USDA Ending Stocks Forecast Errors," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.

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