If you’re wondering how the USDA arrives at its numbers for corn and soybean acres, the researchers at farmdoc Daily have some background for you.
But as the market looks ahead to the June 30 Acreage report, you might be more interested in how reliable those numbers really are.
“Recent history reveals a checkered pattern of changing corn and soybean acreage estimates from March intentions to the final estimate,” says Darrel Good of the University of Illinois’s Department of Agricultural and Consumer Economics. “Many of those changes may have been related to producer responses to changing prices and/or weather conditions. Not fully appreciated, however, is the role that sampling errors might play in the changes in acreage estimates through the cycle.”
How has the USDA done in the past? Here’s a quick report card, according to Good’s analysis of the 19 years between 1996 and 2014:
- Number of years that the final planted acreage was more than the March estimate: 7 for corn, 10 for soybeans.
- Number of years that the final planted acreage was less than the March estimate: 12 for corn, 9 for soybeans.
- Number of years that the June report correctly projected the right “direction” for the final acreage: 13 for corn, 16 for soybeans.
The accuracy of those acreage estimates did vary. Depending on the year, the crop, and the direction of the change, the USDA’s projections could be as close as 25,000 acres or off by more than 3.2 million acres.
With all those factors in mind, Good says he wouldn’t be surprised to see the USDA’s planted acreage jump by 1 million to 3 million acres, in “mostly soybeans.”
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