USDA revisiting crop forecasting procedures
The National Agricultural Statistics Service (NASS) is the USDA agency responsible for making crop yield and production forecasts and estimates. NASS released the first forecasts of the size of the 2013 U.S. corn and soybean crops on August 12. New forecasts will be issued on September 12, October 11, and November 8 and the final estimates of yields and production will be released in the second week of January 2014.
As has often occurred in the past, the August forecasts were met with criticism from some quarters as those forecasts deviated from expectations of some market participants. The critics of the forecasts of yield and production tend to claim incompetence and/or bias on the part of those responsible for the forecasts. While it is not possible to know the motivation of the critics, some of the criticism appears to stem from a persistent lack of understanding of the NASS forecasting methodology. Such a continued lack of understanding is somewhat exasperating since the USDA and others (including the authors) have provided detailed descriptions of the forecasting methodology. In this post, we briefly review that methodology with a focus on one of the main criticisms related to derived ear weights for the August 12 forecast of the U.S. average corn yield.
It is our experience that many of the misunderstandings of USDA yield forecasts revolve around the fact that the USDA uses two types of surveys to collect data for the monthly NASS production forecasts in August through November. These are referred to as the Agricultural Yield Survey (or the farmer-reported survey) and the Objective Yield Survey (or the field measurement survey). Data for the final estimates released in January are collected in the December Agricultural Survey in which respondents report actual acres harvested and the actual yield or production.
For the August 2013 forecasts, the Agricultural Yield Survey (AYS) included 24,363 operations and was conducted in 41 states for corn and 31 states for soybeans. The sample of farm operations surveyed was drawn from those who responded to the survey of planted acreage in June. The sampling design to select the operations to be surveyed uses multiple control items, such as number and type of commodities planted and desired sample size for each commodity, to determine the probability of selecting a particular operation. The same operations will be interviewed each month from September through November. Most of the survey data are collected in electronic form using computer-assisted telephone interviewing. Each state is expected to achieve a minimum response rate of 80 percent.
In the August survey, respondents were asked to identify the number of acres of corn and soybeans to be harvested and to provide a forecast of the final yield of each of these crops. Harvested acreage responses will be retained from month-to- month and the question will not be asked in subsequent surveys. The AYS, however, does contain a distressed acres sub-survey that targets specific crops in states that have experienced extreme weather conditions in order to measure changes when extreme weather does occur. Respondents will be asked to update yield forecasts in subsequent surveys. Note that respondents are not asked to estimate plant population per acre or fruit weights (e.g., ear weights).