The USDA’s annual Outlook Forum traditionally generates headlines with its projections of U.S. crop production seven months before harvest, a challenging exercise considering the many factors that could intervene. A late-winter surge in commodity prices could sway planting decisions, a cold and rainy spring can force last-minute changes among crops, and a summer drought can destroy crop prospects. As a result, USDA projections can look uncannily accurate – its February projection for the 2014 corn crop was only 0.3 percent different than the actual harvest – or sadly off, like last winter’s projection of the soybean crop, which was 14-percent larger than projected in February.
Over the past three years, the USDA’s “baseline” projections of crop size have varied, on average, from the harvest total by 9 percent for corn, 6 percent for wheat and 7 percent for soybeans. The projections are based on conditions in November of the preceding year. The 2012 drought badly hurt the USDA’s average on corn and mildly affected its wheat average.
USDA analysts are certain to update their crop projections at the Outlook Forum, beginning with today’s opening session, to reflect current data on prices, weather and overseas competition.
The projections command attention because the government provides detailed tables of likely plantings, yields, harvests, carry-over supplies and season-average prices. It is far more information than is publicly available from private sources.
Going into the Forum, the USDA projected near-record corn and soybean crops for this year and an average-sized wheat crop. Growers are expected to plant more soybeans and less corn than last year because soybeans are more likely to generate a profit. The USDA projects a record 84 million acres of soybeans and a crop of 3.82 billion bushels, which would be the second-largest ever. Bloomberg pegs plantings at 86 million acres, based on a survey of trading firms and analysts for a crop of 3.856 billion bushels. The record is 3.969 billion bushels, in 2014.
On today’s agenda are a joint presentation by EU Agriculture Commissioner Phil Hogan and Agriculture Secretary Tom Vilsack, a panel discussion on Big Data that includes Monsanto chief technology officer Robb Fraley, and a speech on food and foreign policy by the president of the Council on Foreign Affairs. There also are break-out sessions on food inflation, farm income, agricultural exports and water scarcity. And, as part of the Outlook Forum, USDA will update its forecast of farm exports.