Joint Evaluation of the System of USDA's Farm Income Forecasts

Olga Isengildina‐Massa, Berna Karali, Todd Kuethe () and Ani Katchova

Applied Economic Perspectives and Policy, 2021, vol. 43, issue 3, 1140-1160

Abstract: This study evaluates a system of USDA's Net Cash Income forecasts, released as part of the farm sector's income statement, which includes crop receipts, livestock receipts, government payments, farm‐related income, and expenses from 1986 to 2017. We examine these forecasts jointly for bias, accuracy, efficiency, and compositional consistency. Our findings demonstrate that underestimation in early Net Cash Income forecasts stems from underestimation in crop and livestock receipts as well as expenses forecasts. While most components except government payments contribute to the improvement in 12‐month‐ahead forecasts, improvements in 9‐month‐out forecasts are mostly due to crop receipts and expenses forecasts, and government payment forecasts were a main source of improvement in 6‐month‐ahead forecasts. Despite the observed biases and inefficiencies, these forecasts are compositionally consistent with the actual outcomes and represent realistic projections of the farm sector accounts.

Date: 2021
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https://doi.org/10.1002/aepp.13064

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Persistent link: https://EconPapers.repec.org/RePEc:wly:apecpp:v:43:y:2021:i:3:p:1140-1160

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