USDA tends not to “over-guess” a crop in August and the October WASDE tends to be closer to a crop’s final numbers, but this year is baffling some in the trade. The uncertainty started last year when a late-planted crop led to low expectations but then USDA raised the forecast corn yield in August 2019 by 3.5 bushels/acre. It continued into 2020 when the June planted acreage report shorted the corn crop by 5 million acres below the March prospective plantings survey. Over the past five years, the trade has tended to underestimate USDA’s August corn numbers by an average 372 million bushels. This followed a few years in which the opposite bias existed (see graph below). Wildcards in just the past 24 hours include a c...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.