Should You Trust USDA’s Ag Outlook Crop Numbers?02/29/2016
Producers should use data published at USDA’s 2016 Agricultural Outlook Forum as a baseline for the new-crop marketing year, not as the final word on acreage or commodity prices, says Brian Grete, editor, Pro Farmer.
“The reaction that they get in the marketplace is way more than what it should be, to be honest with you,” Grete tells Chip Flory, host of the Pro Farmer Profit Briefing segment on “AgDay.” “This is nothing more than USDA’s best guess as of past conditions heading into what will be the 2016/17 marketing year.”
In part, farmers should take the data with a grain of salt because they are based on supply and demand tables published in November 2015.
“What USDA thought the acreage may be back then is going to be way different when we get to the reality of the situation,” Grete cautions.
That means it’s best to use these figures as a starting point.
“Conditions will change,” Grete says. “We’ll see acreage adjust up or down based on what spring weather conditions are, price action and so on.”
For example, USDA previewed its soybean figures back in December and estimated 2016 U.S. acreage at 82 million, Grete says.
“The initial reaction was that it seemed light,” he says. “If they continue on with the 82 million, even with the big South American crop coming, it still seems light.”
Source: Nate Birt, Top Producer