University of Illinois Releases Evaluation of USDA Reports

January 17, 2014 06:42 AM

University of Illinois Economists Scott Irwin, Dwight Sanders and Darrel Good today released statistical analysis of USDA reports, which had been requested by USDA Chief Economist Joe Glauber. Concerns have centered on the accuracy of quarterly estimates of corn inventories and to a lesser extent the methodology and accuracy of early season yield forecasts for corn and beans. The full report can be found here.

Based upon their statistical analysis and evaluation, the economists make four sets of recommendations regarding USDA corn and soybean forecasts and estimates:

1.       WAOB corn and soybean yield forecasts:

o   We recommend that the WAOB describe in a written document the exact process used to determine corn and soybean yield forecasts for each month, including the roles of crop weather regression forecasts, subjective judgment, and any other inputs, and this document be available on the WAOB website and explicitly referenced and hyperlinked in the footnotes of the relevant supply and demand tables in May, June, and July World Agricultural Supply and Demand Estimates (WASDE) reports.

2.       NASS corn and soybean yield forecasts:

o   We recommend that NASS institute an internal review of soybean yield forecasting procedures to determine the source of any bias and make changes needed to insure it is eliminated.

o   We recommend that NASS "open up the black box" for each monthly corn and soybean yield forecast as much as possible. This should include: i) presentation of state and national yield forecasts derived from the agricultural yield survey (AYS) and the objective yield survey (OYS), as well as the usual composite forecast derived from the two surveys, ii) presentation of assumptions regarding fruit weights used in deriving OYS yield forecasts during forecast months when these measurements are not available, and iii) some form of recognition of the degree to which weather and crop condition data influence composite forecasts.

o   We recommend that NASS initiate a research project to study how yield monitor data could be incorporated into crop yield estimation procedures.

3.       NASS corn and soybean stock estimates:

o   To improve the accuracy of on-farm stock estimates, we recommend that the same instructions regarding weight per bushel that NASS provides to off-farm survey respondents also be provided to on-farm survey respondents.

o   We recommend that NASS initiate an internal review of corn stock estimation procedures in an effort to determine whether methodological problems are apparent.

o   As an alternative, we recommend that NASS investigate the possibility of adding grain stocks questions to the Agricultural Census.

4.       Domestic usage estimates:

o   We recommend that the WAOB and NASS evaluate the potential costs and benefits of adding a survey of corn feed use that would allow a fuller accounting of corn usage similar to what has been historically possible for soybeans.

o   We recommend that WAOB and NASS investigate the costs and benefits of adding a survey of ethanol plants to provide more accurate estimates of corn used in ethanol production. 

o   We recommend that WAOB and NASS seek funding to replace the former monthly Census Bureau M311J Fats and Oils: Oilseed Crushings report.

To read a summary of each part of the statistical analysis, click here.


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