How Accurate are WASDE Price Estimates?
Starting each May, the USDA includes its estimate of the market year average price for a variety of crops. Having never paid much attention to this estimate, I began to wonder how accurate they were and if these estimates could help inform farm planning, budgeting, and marketing. In our experience, one of the most difficult things people struggle with in planning for the crop year is establishing a reasonable price baseline. Since this price is provided in the WASDE report, we thought it would be useful to see if it provided a useful context within which to evaluate different price levels. This week we take a look at how the May estimates in the WASDE report have compared to the historical market year average prices for corn and soybeans. (more…)