Climate impact on the USDA ending stocks forecast errors

Ziran Li, Ding Li, Tengfei Zhang and Tianyang Zhang

Finance Research Letters, 2022, vol. 48, issue C

Abstract: Analysts and investors that make financial forecasts are prone to climate-induced biases. Would public institutions reporting market-moving forecasts also be influenced by climate? This article analyzes the role of climate in explaining the USDA ending stocks forecast errors. We show that during the period from 1980/81 to 2018/19, the USDA forecasts of corn ending stocks did not take precipitation during the summer growing season fully into account. Increasing precipitation is likely to lead the USDA to underestimate the ending stocks level. The proposed model increases the USDA ending stock forecasts by 12.4%, and the results are robust in different subsamples.

Keywords: Climate impact; Ending stocks forecasts; Financial management (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001799

DOI: 10.1016/j.frl.2022.102930

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