The adage is that big crops get bigger – meaning USDA uses trendline yields for forecasting. But as evidence gathers that weather has been kindly, each successive WASDE report tends to increase the production outlook. Of course, some years the yields are reduced but no one is expecting this to be that kind of a year. There are other anomalies, such as 2014 when the August WASDE increased the soybean number but reduced production of corn. Just taking the larger number of recent years in which crops progressed well, the corn production number increased an average 2.46 percent from the July to August WASDE reports; for soybeans, it was a more robust 4.6 percent increase. Taking those average changes, USDA’s 12 August WASDE 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.