Evaluating the USDA’s Net Farm Income Forecast
Todd Kuethe (),
Todd Hubbs and
Dwight R. Sanders
Journal of Agricultural and Resource Economics, 2018, vol. 43, issue 3
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.
Keywords: Agricultural and Food Policy; Agricultural Finance (search for similar items in EconPapers)
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