Allen Economic Forecasting

International
ELSEVIER
Journal
Economic
of Forecasting
forecasting
10 (1994)
81-135
in agriculture
P. Geoffrey Allen*
Department of Resource Economics,
University of Massachusetts, Amherst,
MA 01003, USA
Abstract
Forecasts
of agricultural
production
and prices are intended
to be useful for farmers,
governments,
and
agribusiness
industries. Because of the special position of food production
in a nations security, governments
have
become both principal suppliers and main users of agricultural forecasts. They need internal forecasts to execute
policies that provide technical and market support for the agricultural sector. Government
publications
routinely
provide private decision makers with commodity price and output forecasts at regional and national levels and at
various horizons. Routine forecasts are not found in the agricultural economics journals that are the sources for
most of this review. The review emphasizes
methodological
contributions
and changes.
Short-term
output or outlook forecasting
uses a unique form of leading indicator.
Because the production
process has long been well understood,
production forecasts are based on the quantifiable features of livestock or a
growing crop. Price forecasts are largely made by conventional
econometric
methods, with time series approaches
occupying minor roles. Because of the dominance
of agricultural economists,
there has been an overemphasis
on
explanation,
and little interest in the predictive power of models. In recent years, some agricultural
economists
have begun to compare forecasts from different methods. Findings generally conform to widely held beliefs. For
short-term
forecasting,
combining
leads to more accurate
forecasts,
better than those produced
by vector
autoregression,
which surprisingly
is the best single method.
Also surprising
is that econometric
models and
univariate methods both do badly compared with naive models.
Key words: Agricultural
prices;
Meta-analysis;
Sector modeling
Agricultural
production:
Forecast
1. Introduction
Economic
forecasting
in agriculture
has some
features
in common
with business
forecasting
and with macroeconomic
forecasting.
But over
time, it has developed
a focus of its own. Just
(1993)
the
*Tel:
and
first
Just
quarter
(413) 545-5715;
and
Rausser
century
(1993)
of
characterize
agricultural
econ-
fax: (413) 545-5853
0169-2070/94/$07.00
0 1994 Elsevier
SSDZ:
0169-2070(94)00519-I
Science
B.V. All rights
comparisons:
Econometric
forecasting;
Judgmental
forecasting;
omits research (from about 1925-1950)

as prescriptive:
recommendations
were made to farmers and managers
in order to increase profits.
During the second quarter century,
the profession shifted toward prediction,
broadly defined,
including
use of econometric
techniques
for
estimating elasticities and forecasting
prices. The
third quarter century,
from 1975 onwards,
has
been characterized
by research on policy, trade
and the global economy
and expansion
to environmental
and resource problems.
Throughout
reserved
82
P.G. Allen
i International Journal of Forecasting
the entire period,

and more markedly
of late,
explanation
of past behavior has been the dominant focus of agricultural
supply modeling, which
is the area to which most agricultural
forecasting
belongs.
Because an assured food supply is important
to national
security, governments
have attempted to quantify
agricultural
production
and to
exert some control
over it. In the beginning,
simply
collecting
and tabulating
data on the
current
agricultural
situation
was a major challenge,
and agricultural
statisticians
played
a
major
role in the development
of statistical
methods
[USDA
(1969)].
Data revision
was
frequent.
Estimates
of production,
for example,
were subject to revision after a new census had
been tabulated.
The large number
of Situation
reports or similarly titled publications
indicates
the fascination
of agricultural
statisticians
with
estimating
the current status of a data series.
Most agricultural
forecasters
were trained as
either
statisticians
or agricultural
economists.
The two professions
have formed what has been,
at times, an uneasy alliance.
Statisticians
have
been largely responsible
for developing
the approach
to outlook
forecasting
that relies on
indicator
analysis. Agricultural
economists
have
tended
to emphasize
ever more complicated
econometric
models. They have worried a great
deal about providing
convincing
explanations
of
economic phenomena,
with the assumption
(generally untested)
that this would be useful not
only for decision making but also for forecasting.
1.1.
A brief history
The aim of the review is to provide a summary

of the main approaches
used by agricultural
forecasters,
with an assessment
of the strengths
and weaknesses
of each approach.
The review
tries to answer two opposing
questions:
which
results from research into agricultural
forecasting
can be generalized
to all kinds of forecasting?
Which conclusions
from general forecasting
research apply to agriculture?
The major sections
discuss the methods
of forecasting
as they appeared
chronologically.
Correspondingly,
the
methods become increasingly
complex.
10 (1994) 81-13.5
Judgmental
forecasts
appeared
first and are
still significant components
of short-term
outlook
forecasts. There is a long history of econometric
analysis,
starting
with single equation
studies.
Greater computing
power saw larger multiequation analyses
appear.
First came studies
that
performed
partial analysis on a single commodity
sector. The interrelation
among certain sectors,
particularly
livestock and feed, was recognized
early on. Early studies on the agricultural
sector
in aggregate
contained
few equations
and were
of simple form. Later, multiequation,
multisectoral econometric
studies appeared.
Although
trend extrapolation
methods
were
widely used in commodity
outlook
studies,
agricultural
applications
of modern
time series
methods
did not appear until the early 1970s.
Gradually,
more sophisticated
efforts were made
by a handful
of agricultural
economists,
their
work ranging from various forms of composite
forecasts
to vector autoregression
(VAR) and
state space models.
Because of the historical
interest in decisionmaking by micro-economists,
there has been a
scattering
of articles relating forecasting
to the
making of choices, including
those concerning
probabilistic
forecasts,
value of information
and
comparison
of forecasting
methods when used to
aid a specific purchase or sales decision. Present
work
in agricultural
forecasting
reflects
the
culmination
of two strands
of research.
From
earliest times, statisticians
have analyzed agricultural data, in part because it was available,
but
also because the results were of value to farmers
and other business
people.
Second,
predicting
the outcomes
of different
policies is a major
activity of many agricultural
economists.
1.2. Scope
of the review
Articles on the methods or results of forecasting were extracted from an exhaustive

search of
the
main
agricultural
economics
journals.
Searches of DIALOG
databases from 1969 (Agricola) or 1970 (Journal of Economic
Literature)
to 1992 and of Government
indexes added to the
list of studies. Coverage
of journals and other
sources is shown in the appendix.
Expanded
P.G. Allen
I International Journal of Forecasting 10 (1994) 81-135
tables that list the source studies for each table

entry can be obtained
from the author.
The review
covers those agricultural
commodities
and inputs
that are the subject
of
forecasts regularly made by government
departments of agriculture
and reported in their publications. These include, at national,
regional and
the production
and value
local aggregations,
(equivalently
area, yield and price) of crops, and
livestock numbers,
production
and value. Also
included
in the review are industrial
products
such as vegetable oils and meals, grain by-products, and agricultural
inputs (e.g. fertilizer, pesticides, but not general petroleum
products).
I
attempted
to include every study that compared
forecasts
of agricultural
commodities
or inputs
done by different methods, as well as all articles
that evaluated
the performance
of agricultural
forecasters
and their methods.
Studies that focus strictly on market efficiency
are excluded,
as are studies that use the commodity futures markets
as a test of efficiency
rather than in a comparison
of forecasting
ability. Readers interested
in such issues should refer
to two recent studies on livestock futures price
movements
around the date of release of USDA
inventory
reports
[Colling
and Irwin (1990),
Schroeder
et al. (1990)].
These studies
also
review earlier work in that area. Also excluded
from this review are commodity
forecasts where
the focus is the industrial
use of food and fibre
products.
Forestry,
fishing and aquaculture
sectors are omitted as well.
The review relies on published work. It would
be a mammoth
task to collect and assess a
representative
sample of published
government
forecasts
and even more difficult
to acquire
private company forecasts and unpublished
government
forecasts.
[Two studies that have performed this task on USDA short-term
outlook
forecasts are included in the comparative
review:
Gunnelson
et al. (1972), Surls and Gajewski
(1990).]
1.3. A note on evaluation
Evaluation
of the different
forecasting
approaches is a key feature of the review. Making
83
fair comparisons
can be difficult for two reasons.
First, the only true test of a forecasting
model is
its forecasting
performance
in the post-estimation period. Partly, no doubt, because of short
data series, testing, if done at all, has often been
by within-sample
simulation.
With post-sample
testing, particularly
of econometric
models, several problems arise. Parameter
updating may be
done as data become known in the post-sample
period, or updating
may be totally omitted.
A
form of forecast contamination
frequently
occurs
when actual values of exogenous
variables
are
used, though these would be unknown
at the
time of the forecast. We do not at present know
how much such contamination
misleads
model
selection
and model
accuracy.
In real-world
forecasting,
unknown exogenous variables would
themselves
need to be forecast.
And forecasts
may be modified
by the analysts
judgment
before
release-a
kind of informal
combined
forecast, even if not acknowledged
as such.
Second,
studies
use
various
criteria
for
measuring
how well a method
makes
point
forecasts
and turning
point
predictions.
The
criterion used by each study to make comparative rankings
is noted in the detailed
tables
available
from the author.
Root mean square
error (RMSE)
is the most widely reported
accuracy measure
and was used to construct
the
table
entries
wherever
possible.
Aggregating
rankings from studies using different
criteria is
cavalier, to say the least. Even worse, the careful
study by Armstrong
and Collopy (1992) shows
that neither of the commonest
criteria (RMSE
and mean absolute percentage
error, MAPE) is
the most reliable for choosing the best method.
Similar sensitivity
to choice of criterion
occurs
when attempts
are made to rank methods
for
their ability to forecast turning-points
(discussed
further in section 7.2).
2. Agricultures
special features
The nature of agricultural

production
and the
historical relations among the different groups of
participants
in agriculture
make agriculture
different from most economic activity. Most prod-
84
P.G. Allen I International Journal of Forecasting 10 (1994) 81-135
uct is unbranded
and sold in markets
where
individual
suppliers
have no say in price determination.
Both nature and government
policy
can have a major impact on a farmers
production
and profits. Farmers
and others connected
with agriculture
are used to receiving
technical and economic information
from publicly supported
institutions.
2.1.
Characteristics of agricultural production
Agricultural
production
is unusual
compared
with most business activity in its strong dependence
on biological
processes.
Farmers
have
minimal ability to alter the rate of development
of a crop or animal.
Second,
for most commodities,
the production
cycle is measured
in
months or years. Other features impose dynamic
structure,
especially
on prices: seasonal impacts
on production,
high cost of adjustment
once
production
is underway
and the need to carry
inventory.
Estimation
of leading
indicators
therefore
became
a major part of short-term
agricultural
production
forecasting,
dominating
any work on price forecasting.
The estimation
of
leading indicators
was a natural extension
of the
data gathering
activity concerning
current
production or inventories.
For example,
estimation
of acres planted
to spring wheat is a good
indication
of harvested
acreage.
In no other
sector has leading indicator
analysis found such
long-term
and widespread
use.
Agricultural
production
appears to meet the
four conditions
laid down by Armstrong
(1985,
p. 196) for good forecasts by econometric
methods: there should be strong causal relationships,
relations
should be capable of being measured
accurately,
causal variables
should change substantially
and it should be possible to forecast
changes
in causal
variables.
Unfortunately,
econometric
methods
do poorly at forecasting
agricultural
production
and prices.
The most
likely reason is the great influence on production
of random shocks. Relative to most manufacturing activity, agriculture
is greatly influenced
by
unpredictable
random
events such as droughts,
hoods and attacks by pests. The consequence
of
these shocks
on production
can be assessed
reasonably
well after they have occurred,
which
is useful in making post-harvest
production
estimates, but not pre-harvest
forecasts.
2.2. Producers
of agricultural forecasts
The predominant
forecaster
of production,
prices and trade of agricultural
commodities
and
inputs in most countries
is central government.
The Economic
Research
Service of the United
States Department
of Agriculture
(USDA-ERS)
contains the largest agglomeration
of agricultural
economists
and produces the greatest number of
agricultural
forecasts.
Government
commodity
specialists
are the main providers
of outlook
information
in Australia,
Canada
and the US
[Johnson et al. (1982)]. Reports on the situation
and outlook for commodity
and input markets at
local, national
and world levels are issued from
one to twelve times a year depending
on commodity and country. Some agencies issue regular
medium-term
forecasts
(2-5 years ahead).
For
example,
Agriculture
Canada
has
issued
medium-term
outlook reports twice a year since
1987 [Cluff (1990)]. Long-term
projections
are
generally issued only irregularly,
and usually for
groups of commodities.
Although
governments
publish many forecasts,
often as regular series,
they also make many forecasts solely for internal
use, for example,
the USDA forecasts
of the
budgetary
cost of the farm program.
Other public agencies,
from the Food and
Agricultural
Organization
of the United Nations
to regional
or provincial
governments,
also
produce forecasts. University
faculty and (in the
US) extension
economists
prepare
forecasts for
general
release
as part of short-term
outlook
programs
for local farmers and agribusinesses.
They may also present
forecasts
in scholarly
publications;
these usually have a methodological focus.
Private companies
that process or trade commodities or supply inputs produce forecasts for
with relatively
simple
in-house
use, typically
models combined with judgment.
They are probably closest to business forecasters
in both approach and objectives.
Private consultants
also
produce
forecasts
for sale, most frequently
as
85
adjuncts
to large-scale
macroeconomic
models.
Farmers
practically
never produce formal forecasts, though most of them doubtlessly
form a
judgment
about future outcomes
of their business choices.
2.3. Users of agricultural forecasts
Farmers may rarely make forecasts,
but they
form the largest group of users. They need to
make production
and marketing
decisions that
may have financial repercussions
many months in
the future.
Short-run
commodity
outlook forecasts, at least in the US, have tended to emphasize production
and inventory
information.
Farmers have more use for price forecasts.
Once
committed
to a product,
farmers are price takers. They produce goods that are homogeneous
or highly substitutable
with the goods of their
competitors,
who may either be their neighbors
or live halfway round the world. They have no
concern with problems
common in manufacturing, such as the amount of sales of a branded
product or what quantity of a specific model to
keep in inventory.
But farmers, especially those
in developed
countries,
must also be concerned
with the ways in which changes in government
policy will alter their business conditions.
Agricultural
journalists
represent
a second
kind of audience for commodity
forecasts. They
are not users in the sense of being makers of
decisions
based on forecast information.
They
provide an indirect way for readers and listeners
(mainly farmers) to receive outlook forecasts.
Processors of food and fiber, and others in the
marketing
chain, need forecasts to aid in their
purchasing
and storing
decisions.
They
too
would probably
like price forecasts,
but would
be able to make greater
use of production
forecasts in their decisions than would farmers.
Larger businesses
also supplement
public forecasts with their own in-house ones.
Governments
in many countries
intervene
in
agricultural
production
to protect domestic
agriculture and provide food security. For this they
need two kinds of information.
First, for legislation and, to a much lesser extent, for program
implementation,
governments
need to know the
consequences
of different policy choices on different groups in society. Agricultural
economists
have been especially
willing, over the last 30
years, to build ever larger models to provide
answers to policy questions.
Emphasis
has been
placed on comparing
proposed policies via simulations,
which has measurably
assisted
legislators. Forecasts
of output and prices are conditional on the policy actually selected. To date,
efforts to forecast which policy will be selected
have been minimal.
[See Rausser (1982), Chapter 18 for a review of the theory and empirical
applications
of endogenous
government
behavior.] Neither have government
or academic
economists
done much to evaluate
a models
ability to forecast the actual consequences
of an
adopted policy. Second, in monitoring
the progress of farm programs
designed
to control
supplies or support prices, governments
would
like to know about the effectiveness
of the
program and anticipated
budget outlays.
3. Short-term
production
forecasting
Government
agencies have issued short-term
forecasts
of prices and production
for many
years. In the early years, the reports contained
much about current
situation
and little about
outlook
[Hudson
and Furniss (1966)]. The development
of methods
of estimating
and forecasting
agricultural
production
in the United
States forms the basis for the organization
of this
section.
[For a politically
oriented
statistical
history,
see US Department
of Agriculture
(1969). For detailed
technical
descriptions
of
data gathering
and analysis, see USDA (1983).
For a summary
of statistical
methods
and detailed information
on timing and content,
e.g.
estimates,
forecasts and intentions
of crop and
livestock reports, see USDA (1989).]
The first agricultural
forecasts were estimates
of crop appearance,
referred
to as condition.
Initially
these were purely judgmental
assessments made by crop reporters,
who compared
the crops current appearance
and vitality with
that of a normal year. These assessments
were
soon used to calibrate
formal production
fore-
86
P.G. Allen I International Journal of Forecasting 10 (1994) 81-13s
casts. The ultimate

development
of short-term
crop forecasts
was based on objective
yield
estimates.
Agronomic
studies related observable
intermediate
characteristics,
such as number of
flowers or number
of ears, to ultimate
yield.
Mid-season
sampling
of observable
characteristics enabled forecasters
to improve their predictions on ultimate
yield. For longer horizons,
a
second type of judgmental
forecast resulted from
surveys of farmers intentions
to plant specific
crops or to breed specific animals.
Formal correction for sampling bias and the relation of past
intentions
to past actual performance
followed.
The
national
annual
outlook
conference
became a feature in most developed countries.
It
was run by the appropriate
government
agency
and attended
by government,
academic
and
private
agricultural
economists.
The first such
conference
occurred
in the US on 20-21 April
1923, and by 1929 had evolved into a standard
procedure
[Kunze (1990)]. It was later moved to
February
and is now held (more usefully for
production
planning)
in December.
In Canada,
the first federal and provincial
conference
was
held in Ottawa in February
1934. Todays typical
conference
features
a number
of commodityspecific sessions in which government
analysts
review
the present
situation
and forces
of
change. The analysts then present forecasts and
receive feedback from the audience.
3.1. Judgmental
reporting of condition
In 1862, the editor of the American Agriculturalist sought and published

monthly crop condition summaries
from May to September
using
information
submitted
by farmer
subscribers
[Ebling (1939)]. The following year, the USDA
took over the task. Its first monthly crop report
stated the condition,
as of May 1863, of 19 crops
in 21 Northern
states and the Nebraska Territory
[Newell and Warrington
(1962)].
In 1910, the crop reporting
agency (at that
time the USDA Bureau of Statistics) was issuing
quantitative
estimates
of acreage,
production
and value for 13 crops, condition
reports for 23
crops and pasture,
and inventory
estimates
for
five livestock
species. By 1920, the number
of
estimates
had roughly
doubled
[Becker
and
Harlan
(1939)].
Judgmental
estimates
of the
state of a growing crop, as assessed by farmer or
government
crop reporters,
provided the USDA
with its main means of crop production
forecasting for nearly 100 years. Condition
summaries
are still important
in early-season
estimation
of
field crop yields [USDA (1983)].
3.2. Quantitative analysis of condition and use
of par
The first USDA forecast,
as opposed to condition report, was made in May 1912 for winter
wheat and from the following
month for most
field crops, excluding cotton, a politically
sensitive crop. Between 1912 and 1929, the reported
condition
of various crops was interpreted
as a
forecast
of yield based on the par method
[Becker
and Harlan
(1939)].
Essentially,
the
monthly condition
of each crop in each state was
converted to full or 100% equivalent
yield, with
adjustment
for trend. For example,
a condition
value of 80% for winter wheat on 1 July, when
the final yield in that state for that year was 28
bushels,
gave a 100% equivalent
yield of 35
bushels (28 + 80 X 100). By taking, for example,
a 5 year moving average of 1 July full yields,
the statistician
obtained
the 1 July par yield.
The following
years yield forecast was simply
par yield multiplied
by condition.
Because some
crop reports covered more acreage of a given
crop than others, USDA statisticians
first calculated a yield forecast
within a crop reporting
district, then aggregated
using estimated
acreage
in the same area as weights [USDA
(1983)].
Field crop production
forecasts were calculated
as the estimated
acres available
for harvest
multiplied
by the yield forecast.
Although
acreage weighting removed some of
the biases caused by the non-probability
samit could
not accommodate
pling procedure,
biases from problems
in forming judgments
or
from technology
changes. After 1929, correlation
of condition
and final yield replaced
the par
method as the means of yield forecasting
[USDA
(1969)]. Later, statisticians
used charts of monthly condition
and final yield plotted against time
to judgmentally
adjust
yield forecasts.
Even
later, especially where yield trends were noted,
multiple
regression
of condition
and time variables on final yield was used to make yield
forecasts.
For fruit production,
a modified par method
was used [Becker and Harlan (1939)]. Each past
year, the condition
at time of harvest, summarized from crop reporters
judgments,
was divided into estimates
of final production.
The
result was the historical par or percentage
of full
production
for that year. The regression
of
reported
par on historical
par showed that reporters
tended
to slightly
underestimate
par
(leading to a consequent
underestimate
of yield)
coupled with over-optimism
in good years. Historical par values also trended
upwards
over
time. These two patterns were charted and used
first to predict the next historical par from the
latest reported
condition
and then to predict
total production
in the current
year. This approach was found to give forecasts as good as
those relating reported
condition
to yield or to
actual
production
[Palmer
and Schlotzhauer
(1950)].
3.3. Objective yield forecasts
In 1925, Frank
Parker
proposed
a plan to
improve
cotton yield forecasts by counting
the
number of plants and number of bolls of cotton.
Such data have been regularly
collected
since
1928 [Becker and Harlan (1939)]. In 1951, the
USDA Crop Reporting
Service made estimates
of cotton production
based on these data that
turned
out to overstate
actual production
by
about 15%. Since the commodity
market relies
heavily on crop forecasts,
dealers were paying
farmers
relatively
low prices for the supposed
bumper
crop. Farmers were estimated
to have
lost about $125 million in revenues
[U.S. Congress (1952)].
Presumably
the purchasers
of
cotton gained the windfall $125 million once the
forecast
error was revealed
by the end of the
year. However,
the cost of the error prompted
a
Congressional
inquiry from which several recommendations
were made, principally
the establishment of a special unit within the Bureau
of
87
Agricultural
Economics
to examine
problems
with the present methods
and devise improvements. Although
the USDA makes cotton price
forecasts for internal use, Congress still prohibits
their publication.
Commentators
at the time
[Wallace (1953)] suggested
that the USDA already had the means to make improvements,
since it had developed
the area probability
sampling method and had access to studies on
the effect of weather on yield of cotton, corn and
wheat.
By 1956, objective
forecasting
of crops was
advancing
on several fronts. The method essentially required
a detailed
quantitative
understanding of plant development
so that observable
characteristics
measured
earlier
in the season
could be related
to final harvest
weight
by
regression
analysis.
One problem
was that the
forecast
was required
for the entire
United
States on the same date each year. On 1 August,
for example,
plant development
might be delayed compared with a normal year. Also, plants
at the northern
limit of a crops production
area
would be less developed
than plants in states to
the south. Finally, to overcome
the biases and
uncertainties
which accompany
judgmental
assessments,
it had to be possible to count, weigh
or measure the characteristics
in a standard way.
As the original
culprit,
cotton was the first
crop to be investigated.
By 1 September,
the
final number of bolls has appeared
and the boll
count is a good predictor
of total yield. However, for the 1 August
forecast,
fruits are in
different stages of development
and the numbers
visible exceed the final number of bolls. Surveys
conducted
in 1954 and 1955 established
the
relation
between
counts of different
kinds of
fruits on 1 August and final numbers
of bolls,
and between fruit count per plant and average
weight per fruit. In 1956, the relations were used
for a state by state forecast of cotton yield in a
ten state region
[Hendricks
and Huddleston
(1957)].
Similar
problems
in
relating
observable
characteristics
of young corn and young soybeans
to yield were reported by, respectively,
Huddleston (1958) and Kelly (1957). Objective
yield
surveys became operational
for cotton and corn
88
P.G. Allen I International Journal of Forecasting
yield forecasts in 1961, for wheat in 1962 and for

soybeans
in 1967, and have since expanded
to
include
potatoes,
several tree nuts and citrus
fruits [USDA (1983)].
3.4. Producer intentions
In 1918, the USDA sent out a questionnaire
in
order to find out how great an acreage of spring
wheat farmers
intended
to plant.
USDA
administrators
must have had second
thoughts
about the effort because they kept the results
secret
[Ebling
(1939)].
In 1923, the USDA
published
the first report on intended acreage for
nine spring-sown
crops, including
cotton, based
on a non-probability
survey of individual
farmers. Farmers
reported
that they intended
to
increase
cotton acreage by 12%, an underestimate of the actual increase.
In a response that
was to be echoed
almost 30 years later, the
forecast caused activity on the cotton exchanges
and some reduction
in price. The following year,
Congress
passed
legislation
prohibiting
future
intentions
reports for cotton, on the grounds that
such reports were more harmful than beneficial
[Becker and Harlan (1939)]. The legislation
was
not repealed until 1958 [USDA (1969)].
One danger became apparent in focussing on a
series of intentions
to plant.
The series was
constructed
by summarizing
farmers responses
to the question:
Compared
with the acreage of
(name of crop) you harvested
last year, how
much percentage
increase or decrease in acreage
do you intend
to plant this year? While the
harvested
acreage
can never
exceed
planted
acreage,
it can sometimes
be much less, when
drought or disease results in a yield too small to
harvest profitably.
A large percentage
increase in
intentions
to plant in the following year might
only represent
an attempt
to return
to the
normal pattern. The obvious solution of comparing planting
intentions
with actual planted acres
had to await data on planted acreage. By 1938,
the USDA
had sufficient
statistics
on acres
planted to be able to convert planting intentions
reported
by farmers into prospective
plantings
[Becker and Harlan (1939)]. At present, acreage
intentions
or prospective
plantings
are reported
for all major field crops except cotton, process-
10 (1994) 81-13.~
ing vegetables
and mushrooms,
with planted
estimates
for fresh
vegetables
and
acreage
melons [USDA (1983)].
In the US, the first pig crop report was issued
in 1922, based on a survey delivered
to pig
farmers by rural mail carriers.
Breeding
intentions have since been surveyed quarterly
in the
major producing
states, and semi-annually
elsewhere. Estimates
of intended
breeding
are supplemented
by inventory
surveys for all classes of
stock. Semi-annual
inventory
surveys
are the
main method of forecasting
cattle production.
3.5. Probability sampling
Non-probability
sampling
by mail is cheap,
particularly
when dealing with specialized
types
of production.
Its disadvantages
are the difficulty
of expanding
sample findings to the population
and the inability
to estimate
sampling
errors.
Probability
sampling
requires
definition
of a
proper random sample. Because the sample unit
may be a collection
of fields and not necessarily
an entire farm, enumeration
is sometimes
by
interview rather than by mail. More accuracy can
be achieved with a smaller sample and standard
errors can also be computed.
Probability
sampling for acreage estimates started in June 1961
in 15 states [Trelogan
(1963)], reaching the rest
of the US by 1965. The USDA has continued
to
refine its sampling techniques
to maintain
sampling accuracy
while reducing
cost. Multipleframe sampling supplemented
the livestock mail
and probability
surveys
entirely
resurveys,
placed the non-probability
mailings from about
1979. In multiple-frame
sampling,
all producers
in a randomly selected area (the area frame) are
identified
as belonging
or not belonging
to a
master list of names (the list frame). By knowing
the inventories
or intentions
of each farmer in
the area frame, the list frame can be expanded to
represent
the entire population
[USDA (1983)].
3.6. Evaluation of short term forecasting for
outlook work
Farmers
and economists
have criticized
the
timing, usefulness
and accuracy of USDA outlook reports. Criticisms on timing made some 25
years ago [Bottum (1966), Daly (1966)] may no

longer be valid. The annual outlook conference
has been moved forward to December.
Prospective plantings reports appear at the beginning
of
March,
before
many farmers
have begun
to
plant. Estimates
useful for livestock producers
appear frequently,
from quarterly
(for hogs and
pigs) or monthly
(cattle on feed) to weekly
(broiler hatchery).
Movements
in futures prices
when hogs and cattle reports appear [reviewed
by Schroeder
et al. (1990)] suggest that market
participants
use the outlook
information
(perhaps because it provides a more accurate estimate of current situation).
Once crop or animal
production
is underway,
farmers responses
to
price signals are limited, as is the impact of their
actions on forecasted
prices. Some actions are
possible and perhaps profitable.
For example (as
discussed later in section 8.2), forecasts can be
used for crop storage
and livestock
rearing
decisions.
A continuing
problem
is ensuring
the usefulness of forecasts.
Farmers
want price forecasts
when the planting or breeding decision is being
made. Planting
or breeding
intentions
are reported instead. And forecasts of acres or animal
numbers
need to be translated
into total production
and then into price. Historically,
both
the US and Australian
outlook programs seemed
deliberately
to leave the more difficult step of
price forecasting
to individual
farmers. For example, the agricultural
outlook for 1930 stated
[quoted in Kunze (1990) p. 2571:
These reports
are not designed
to tell individual farmers what to do, but to give them
the basic facts upon which to make intelligent
decisions in view of their local conditions.
Matters have improved
only slightly. Today,
the discretion
of the commodity
analyst appears
to determine
whether
or not outlook
reports
contain quantitative
price forecasts in the narrative. As a compromise,
government
agencies
could issue a price forecast and then explain the
logic behind it [Freebairn
(1978)].
Improved
accuracy through the use of better
data and techniques
was an early concern [Botturn (1966), Daly (1966), Freebairn
(1978)]. A
number
of beliefs exist [Bullock et al. (1982)]:
(1) production
forecasts must be perfectly accur-
10 (1994) 81-135
89
ate to be of value; (2) if outlook reports were

not released, prices to farmers would be higher;
(3) inaccurate reports are a major cause of shortrun resource
misallocation.
These prove to be
myths. A widely accepted psychological
explanation is that people explain their successes as a
result of their own efforts and their failures as a
result of things outside their control. In a simple
two-period
model, Bullock et al. (1982) show
diagrammatically
how perfect
information
(a
perfect forecast)
can be used to determine
the
inventory
carryover
(say, for grain) at which
marginal
social value (benefits
to consumers)
equals marginal
social cost (storage
charges).
With no information,
the carryover
decision
cannot be avoided,
but the carryover
quantity
will be sub-optimal.
As long as the information
in a forecast causes decision makers to store a
quantity
closer to the optimal
carryover,
such
information
has value.
Using historical
information only, decision makers would on average
choose to carryover
the correct
amount,
but
from year to year price would be either too high
or too low, not consistently
higher. The third
myth is more difficult to demolish,
since optimal
resource
allocation
in a risky environment
depends
on the
decision-makers
risk-reward
tradeoff as well as knowledge
of the production
Studies of production
on individual
response.
farms have concluded
that actual production
is
both inefficient
in use of inputs and too conservative compared with decision-makers
stated
risk preferences.
The studies described in section
8.2 show limited gains in profitability
from using
forecast information.
Using phrases
such as ample supplies
will
likely keep prices below last years levels, outlook reports have provided a form of probabilistic information
for a long time, especially
for
prices. Although
there was early recognition
of
the need to provide
probabilistic
information
[Bottum
(1966), Timm (1966)], Nelson (1980)
was the first to suggest how such an outlook
program might be set up. The need is as great
today. Point estimates
of production
and yield
are almost never accompanied
by confidence
intervals
or similar
indications
of reliability.
Business forecasts suffer from the same problem.
Dalrymples
(1987) survey of 134 US businesses
90
found
that only 22% of sales forecasts
were
frequently
or usually accompanied
by interval
estimates.
The top panel of Table 1 summarizes
studies
that compared
forecasts from mechanical
methods with outlook
[Baker and Paarlberg
(1952),
Elam and Holder (1985), Freebairn
(1975), Jolly
and Wong (1987)]. Sometimes
the comparison
is
with a naive no change forecast, compared
with
which outlook is generally,
though not universally, better. In the most comprehensive
study of
this kind, covering
seven crops over 42 years,
Gunnelson,
Dobson and Pamperin
(1972) found
that the first USDA crop production
forecast of
the year was better than naive 70% of the time.
Freebairn
(1975), who studied annual forecasts
of price and output for ten crop and livestock
products
over 8 years,
found
slightly
better
results for (Australian)
BAE forecasts.
Later in
this review, a group including
outlook forecasts
along with other expert forecasts will be shown
to be more accurate than naive and exponential
smoothing
methods,
but generally worse than a
Table 1
Outlook
forecasts
Type
Comparison
Quant
Number
with naive
6
Price
Quant
Price
Econometric
Quant
compared
studies
3
studies
range of methods. As Armstrong

(1985, pp. 9296) maintains,
experts and commodity
analysts
do seem better at determining
current
status
than at making forecasts.
Evidence
ranging
from capital
investment,
consumer
durable purchases and political voting
shows that intentions
can act as good forecasts.
Certain
conditions
must be met: the event is
important,
responses
can be obtained,
respondents have a plan that they can fulfil, that they
report correctly
and that they are unlikely
to
change [Armstrong
(1985)]. Acreage intentions
data meet these conditions
all too well. When
prospective
plantings
data are reported
to the
public, most farmers are unable to change their
production
plans, even though this was one of
the purposes of reporting intentions
data [USDA
(1969) pp. 67-681.
Use of planting intentions
data led to noticeable improvements
in forecast accuracy.
Foote
and Weingarten
(1958) made forecasts
of 19
crops using production
data only and compared
these with forecasts based on planting intentions.
with others
Number
series
Finding
36 cr
5 Iv
1scr
6 Iv
Accuracy better than naive about 70% of time
15
3
9
10
Turning point better than naive about 85% of time
cr
Iv
cr
Iv
Price
25 cr
1 Iv
1 cr
Quant
Price
1
1
6 cr
1 cr
Accuracy better than naive or trend about 70% of time
Turning point better than naive. trend or random
Including
improved
producer intentions
accuracy
about 70% of time
as explanatory
variable
always
Including producer intentions as explanatory

turning point accuracy 85% of time
variable
improved
cr = crops. Iv = livestock products.

Naive is either a no change forecast or trend forecast or (in one study) the futures price.
Accuracy;
(root) mean squared error (R)MSE. mean absolute percentage
error MAPE, or the average of Thens R, R = (F(t) ~
F(t - l))/(A(t) - F(t ~ l)), where F(t) is current forecast,
F(t - 1) is previous forecast (naive forecast in this case) and A(t) is
actual production.
A value of R between 0 and 2 indicates that the current forecast is an improvement.
Turning point ratio; number of correct one step ahead increases or decreases
divided by total number of changes forecast.
P. G. Allen I
use of intentions
data explained
Generally,
about 60-80%
of the actual variation
in production; methods that did not use intentions
data
explained
only 20-50%
of the variation.
Ladd
and Kongtong
(1979) reached similar conclusions
for within-sample
predictions
on six crops. Livestock intentions
might appear to be more useful,
since the decision
to sell or retain
potential
breeding
stock can be made at several points in
the year. However,
Trapp (1981) showed that
intentions
data forecast beef marketings
more
accurately
than do objective
indexes of growth
rate,
weights
or inventory
numbers.
These
studies are summarized
in the lower panel of
Table 1.
Errors in USDA crop forecasts decreased with
each monthly revision of production
and exports
of wheat, coarse grains and soybeans [Surls and
of these
Gajewski
(1990)] and of production
crops
plus late potatoes
[Gunnelson
et al.
(1972)]. Lowenstein
(1954) reported
similar results for cotton. These results support the advice
given in the forecasting literature that it is best to
use the most recent data.
4. Single equation econometric
91
InternationalJournal of Forecasting 10 (1994) 81-135
forecasts
Regression
analysis
and deterministic
trend
analysis share the common origin of correlation
analysis.
This section
describes
the dominant
causal modeling
approach.
Trend analysis was a
rarely reported
but probably
widely used forecasting method.
4.1. Early history
Henry Moore, widely recognized
as the founder of statistical
economics,
presented
the first
econometric
forecast
for an agricultural
commodity [Moore (1917)]. His regressions of cotton
yield on rainfall
and temperature
in selected
months made better forecasts than USDA forecasts based on condition
reports. Later, agricultural statisticians
estimated
several true single
equation
forecasting
models [Sarle (1925), hog
prices;
Smith (1925),
cotton acreage;
Ezekiel
(1927),
hog prices;
Hopkins
(1927),
cattle
prices). These models specified lagged explanatory variables

whose values were known at the
time of making the forecast,
a feature that is
missing from many later studies. Ezekiel (1927)
compared short-run
price forecasts (l-6 months
ahead) from this empirical
formula
approach
with forecasts
based on the survey indicators
described in section 3.4. The empirical formula
approach
appeared
to be more accurate,
based
on six forecasts, though a footnote to the paper
hinted that a bigger analysis might reverse the
findings.
Ezekiel also recognized
the value of
combining,
noting (p. 29) . . . eventually
the
most satisfactory
results may be obtained
by
some combination
of the . . . methods.
After
this pioneering
effort, dynamic supply response
became
the main line of time-related
single
equation work. Its history is almost entirely one
of explanation
and policy
analysis
[Nerlove
(1958), chapter 31. One of the few efforts of pure
forecasting
was by Cox and Luby (1956), whose
specifications
for 6 and 12 month ahead price
forecasts
for hogs also relied on explanatory
variables known at the time of the forecast. They
reported average errors (probably
corresponding
to MAPE) of 8.1% to 9.3% for 16 annual and 32
semi-annual
within-sample
forecasts.
All but
nine of the 48 forecasts
indicated
the correct
direction of price movement.
4.2. Crop and livestock
production
and price
Because most crops have an annual growing

season, crop response models are typically annual. The generic supply response model is
QT =f(f:)
>
where Q* is anticipated
output, P* is expected
price and t is the time period. Other crop and
input prices (or indexes)
often appear
as explanatory
variables.
Production
response
is frequently disaggregated
into a two-equation
recursive system, first of acreage response,
then yield
response.
In the simplest model, farmers price
expectation
is assumed
to correspond
to the
naive no change model and P* is replaced
by
lagged price. Use of a futures price, if one exists
02
P.G. Allen
I International Journal of Forecasting
for the commodity,

has occasionally
been tried.
Slightly more sophisticated
is the adaptive
expectations
model for price developed
by Cagan
and Nerlove [Nerlove (1958)]:
PT - Pl,
= cl(P,_, -P,T,)
o<Ly < 1.
Equivalently,
expected
price is the previous
expected price plus a fraction ((Y) of the previous
error in expectation.
Some algebra shows that
expected price is also an exponentially
decaying
function
of past prices. The adaptive
expectations model corresponds
to simple exponential
smoothing
of observed prices.
By a suitable
transformation,
output
is a
function
of lagged price and lagged output.
Similarly,
output can be expressed
as previous
output plus a partial adjustment
of the difference
between
anticipated
and previous
output,
the
technical rigidities model. The final result is that
output is a function
of price lagged one period
and output
lagged one and two periods.
[See
Askari and Cummings
(1977) for an extensive
review.] While such equations
could readily be
used for one step ahead output forecasting,
this
was rarely done and even more rarely published.
Cape1 (1968) actually
produced
a forecast
of
Canadian
wheat acreage, although,
since it was
published
before
the forecast
date, he could
report no comparison
with actual acreage.
For price forecasting,
a demand
equation
is
added. Price and quantity are usually assumed to
be recursive in agriculture,
though simultaneous
specifications
exist. LEsperance
(1964) found
forecasts
from a reduced
form to be slightly,
though
not consistently,
more accurate
than
single equation
forecasts. A common alternative
is to estimate a single reduced form equation for
price, based on a simultaneous
system. This will
typically contain contemporaneous
variables for
income and other commodity
prices. Since explanation or policy analysis was the usual purpose
of any study, econometricians
ignored the need
to first forecast contemporaneous
variables
before the price equation
could be used in prediction.
Livestock production
has been modeled by the
same partial adjustment
as described for crops.
II) (1994) 81-13
Naive price expectations

were used initially
to
explain the existence
of hog and beef cycles.
Since livestock
production
is year round,
in
contrast to crop production,
studies soon came
to use quarterly
or monthly
data series and
different
methods
of describing
seasonal
and
cyclical patterns were employed.
Livestock production
and more especially
prices have been
popular subjects for single equation
econometric
studies.
4.3. Evaluation
Institutional
forecasters
produce
many forecasts, but far fewer reports detailing the methods
used. The single equation
econometric
approach
has been popular,
though the published
record
contains
insufficient
information
to state what
proportion
of forecasts are produced
from this
approach.
Most official government
forecasts
are, in any case, the consensus
of a committee
[Newell and Warrington
(1962)]. Tables 2 and 3
summarize
all single equation forecasting
studies
located, aside from the earliest studies cited in
section 4.1. Since 1964, 13 studies used single
equation
methods
to forecast
17 quantities
(acres, production,
yield and export quantities)
and eight prices of crops. On the livestock side,
there have been 39 studies since 1952. Fifteen
studies have examined
production,
20 investigated price and four, both.
The production
studies were almost equally divided between hog
and beef production,
with a few on lamb, milk
and wool production.
If the studies summarized
can be taken to be representative
of the state of
the art, a number of weaknesses
are evident that
limit their usefulness.
Over half (46 of 85 specifications)
require
ancillary
forecasts
of contemporaneous
independent
variables
to make forecasts of the dependent
variable.
This statistic is
slightly misleading,
since a proportion
of these
studies
only require
standard
macroeconomic
forecasts
such as disposable
income or a consumer price index. Almost all of the studies that
test forecasting
performance
do so within-sample. Typically,
actual values of explanatory
variables are used (ex post forecasting),
even though
these would be unknown
in a real forecasting

Table 2
Single equation
econometric
Type of series
studies,
by commodity,
1952 onwards
Data frequency
No. of series
No. of series which
All crops
Acres/yield
Export quant
Price
25
10
7
8
22
10
7
5
All livestock
Production
Price
60
22
38
8
6
2
3
1
2
93
Fcst
Comp.
_
_
-
18
7
7
4
17
3
7
8
11
1
7
4
12
3
10
5
2
3
31135
6110
25
49
16
33
31
8
23
1
_
_
1
_
_
2
_
_
21
9
22
1
1
-
D*
Curr. expl. var.
12 crop studies, 38 livestock studies, 1 both.

*Data frequency:
A, annual; S, semi-annual;
Q, quarterly;
B, bimonthly;
M, monthly; D, daily.
Curr. var.: number of series with contemporaneous
explanatory
variables.
31135 means that four series had known explanatory
variables for one step ahead that were unknown for several steps ahead. Fcst.: number of series that produce forecasts after the
estimation
period. Comp.: number of series that compare forecasts with other non-econometric
methods.
context. In an article that demonstrated

a largely
ignored point, Fox (1953) observed that error of
forecast was greater in ex ante forecasting,
when
explanatory
variables
needed to be forecast. In
his example, when corn production
and personal
income both needed to be forecast, the standard
error of forecast for 12 months ahead corn price
increased
by two and a half times. Though
logically defensible,
the finding contrasts markedly with the empirical
evidence
from macroeconomic
forecasting
[Armstrong
(1985) p. 241,
McNown (1986)].
Later studies have presented
single equation
econometric
models mainly in comparison
with
other techniques.
Since 1980, one of six studies
Table 3
Single equation
Type of series
econometric
studies,
No. of series
by date,
2
10
29
38
199osl
Total
85
1952 onwards
Data frequency
A
1950s
1960s
1970s
1980s
on production
forecasting and 12 of 16 studies on
price forecasting
were comparative,
mostly with
time series methods.
The studies represent
the
state of the art in single equation
econometric
specification
and reveal its present limitations.
In
short-term
forecasting,
as will be shown in section 7.2, it performs poorly against time series
methods. Since vector autoregression
is shown to
be much more accurate, the most likely cause of
poor performance
is insufficient
attention
to
dynamic specification.
Crop production
forecasts can reasonably
be
based on annual series. In particular
situations,
for example
where seasonal
prices of stored
crops differ from the post-harvest
price by only
No. of series which

B
1
6
7
16
1
2
-
11
19
_
_
_
9
3
2
30
32
14
D*
Fcst
Comp.
3
17118
27129
2
9
19
33
5
3
10
24
5
49153
66
42
_
2
2
Curr. expl. var.

O/l
Different
ending dates depending
on source. See Appendix
A for details.
*Data frequency:
Q, quarterly;
B, bimonthly;
M, monthly; D, daily.
Curr. var.: number of series with contemporaneous
explanatory
variables. 49/53 means that four series had known explanatory
variables for one step ahead that were unknown for several steps ahead. Fcst.: number of series that produce forecasts after the
estimation
period. Comp.: number of series that compare forecasts with other non-econometric
methods.
94
P.G. Allen
the storage cost, annual crop price forecasts can

be useful. Recent livestock studies seem to have
settled on quarterly
forecasts as being the most
appropriate,
even when monthly
or more frequent data are available,
especially
for prices.
The usefulness
in decision making of such aggregate forecasts is doubtful,
as has been admitted
by one of the few studies to put forecasting
in a
decision making context [Brandt (1985)].
We lack information
on the usefulness
of
single equation
econometric
forecasts at longer
horizons.
In a path-breaking
study, Gold (1974)
compared
annual series for 1.5 agricultural
commodities and 13 non-agricultural
commodities
or
services. Each series was broken into a succession of mutually exclusive sets of length 10 years.
The process was repeated
for 15year
and 20year periods. In each case, Gold made forecasts
to different
horizons.
For 10, 15 and 20 years
ahead forecasts,
agricultural
series of 20 years
gave better results than did series of 15 or 10
years. For non-agricultural
series, lo-year data
sets were best and 20-year
data sets worst.
Agricultural
series appear to accommodate
fixed
parameter
models better than do non-agricultural series.
Conway, Hrubovcak
and LeBlanc (1990) tested six kinds of stochastically
varying parameter
(SVP) specifications
(Swamy-Tinsley,
HildrethHouck,
Kalman
filter
and Cooley-Prescott)
against six others (autoregressive
and fixed parameter models) and the naive no change model.
At both 5-year and lo-year horizons, net capital
investment
in agriculture
was most accurately
forecast by SVP (with the notable exception
of
Cooley-Prescott),
with naive no change next and
fixed parameter
models
last. But with such
limited
information,
nothing
definitive
can be
claimed
for the forecasting
ability of varying
versus fixed parameter
econometric
approaches.
5. Sectoral models
A sectoral model contains,
at a minimum,
a
supply equation
and a demand
equation
for a
single commodity.
Given the lag between decision making
and output,
particularly
in crop
10 (lW4)
81-13s
production,
it was common in the early studies
to treat the equation as a recursive system and so
justify the use of ordinary
least squares estimation. When the commodity
is storable,
an inventory demand equation is required,
separate from
demand for consumption,
at which point a market clearing identity will also be needed.
Sometimes there are demands with significantly
different characteristics,
for example,
wheat
for
human food or animal feed, eggs for consumption in shell or for breaking.
Trade between
countries
or regions
adds import
supply
and
export demand
equations.
Alternatively,
trade
can be handled in a spatial equilibrium
programming model. A further complication
with livestock is that the inventory
can be used as investment for further production
or can be sold. All
of these complications
can usually be accommodated by a ten equation
system, except where
many regions are being analysed.
Sometimes,
sectors are so intimately
linked
that a multisector
model
is called for. The
commonest
example concerns
the livestock and
feed grains sectors. At some point, the multisector system becomes large enough to qualify as a
large scale model,
as described
in the next
section. The problem
in forecasting
with a sectoral model is either that linkages with the rest of
the economy
are ignored,
or they are incorporated
through
contemporaneous
explanatory
variables,
which must themselves
be forecast.
Stand-alone
large scale models and those linked
with large scale macromodels
of the economy
attempt
to endogenize
all variables.
They are
equipped to forecast, but at the cost of complexity.
5.1. Econometric
models
The development
of sectoral models slightly
preceded that of large scale econometric
models.
There are a large number of sectoral models in
the agricultural
economics literature.
The greater
proportion
are concerned
with explanation
or
policy analysis. As noted from Table 4, the surge
of interest in forecasting
occurred in the 197Os,
as both Canada and the US and, to a much lesser
extent,
Australia
struggled
to bring a set of
P.G. Allen
Table 4
Distribution
of forecasting
studies
I International
Journal
of Forecasting
over time
Time interval
Single equation
Single sector
1950-59
1960-69
1970-79
1980-89
1990-91
2
10
29
38
2
9
34
14
1
(2Y
(12)
(34)
(45)
(7)
85
Total
60
(100)
Different
ending dates. See Appendix
A for details. Numbers
in parentheses
There are 51 studies using single equation methods and 53 sectoral studies.
sectoral models together

into a comprehensive
system [Agriculture
Canada
(1978), Salathe et
al. (1982), Kingma et al. (1980)].
Of the 60 sector models summarized
in Tables
4 and 5, the majority
(43 studies) are livestock
models, of which 12 concern the poultry sector,
ten, the beef or beef-feed grain sector and nine,
the hog sector. Practically all the models contain
contemporaneous
exogenous
variables.
A handful, usually those relying on one or two macroeconomic
variables
and aggregate
indexes,
reported the values of exogenous variables used to
make ex ante forecasts.
Where forecasts were
made beyond the end of the estimation
period
they were short, typically covering four quarters.
Theils U statistic was reported
irregularly
(frequently the incorrect
U, ; readers of the agricultural economics
journals
were unaware
of the
Table 5
Data frequency
in sector
and aggregate
Type of model
95
10 (1994) 81-135
Multi-sector
1
4
9
8
2
(3)
(15)
(57)
(23)
(2)
24
(100)
are number
of models.
(100)
are percentages.
These
(4)
(17)
(38)
(33)
(8)
consequences
of the different ways of computing
U until Leuthold
(1975) pointed
them out,
though
Bliemel
(1973) had already
done so
elsewhere).
Theils U, allows a comparison
with
the naive no change model, although,
with the
typical sample of size four, the test has low
power. The most popular assessment
technique
was validation
by dynamic simulation
within the
sample used for estimation.
The process was
started,
somewhere
in the estimation
period,
with actual values of lagged endogenous
variables. The structural
system was then solved for
each successive
time interval
using calculated
lagged endogenous
and actual exogenous
variables. As long as the dependent
variables
predicted
in this way gave reasonable
forecast
accuracy and turning point statistics,
the model
was regarded
as suitable for use in forecasting.
studies
No. of series
Data
frequency
Single sector models

Crop
Livestock
Mist
15
43
2
10
15
2
20
1
3
6
1
Total
60
25
23
10
24
16
Multisector
or aggregate models
8
Data frequency:
Q, quarterly;
B, bimonthly;
M, monthly. S includes models with some A equations,
Q includes models with some A and S equations,
M includes models with some A and Q equations
(five of 60 sector models are
mixed).
96
P.G. Allen
But
such
nonstochastic
simulations
do not
adequately
test dynamic
specifications
[Shapiro
(1973)], nor do they offer much of a guide to
forecasting
ability.
5.2. Programming
approaches
Programming
models are not usually thought
of as being suitable
for either explanation
or
forecasting.
They had a surge of popularity
in
the
mid
1970s
especially
in Canada
[e.g.
MacAulay
(1978), Martin
and Zwart (1975)].
Spatial equilibrium
or interregional
competition
models
have one advantage
over econometric
methods
in multiregional
analyses.
They can
distribute
the total quantity
of a commodity
among regions in an internally
consistent
manner. Spatial equilibrium
models also calculate the
commodity
price in each region.
The market
clearing
identity
is raised to a new position of
prominence.
Additional
constraints
prevent
prices in different regions exceeding the cost of
transporting
the commodity
between them. For
accuracy,
when defining
transport
cost, close
attention
needs to be paid to historical
price
differentials
between
regions where trade has
occurred.
The differential
can consistently
exceed the cost of shipping
goods between
the
regions.
For forecasting,
supply and demand functions
for each region must be updated and the spatial
equilibrium
found. Quantities
produced and consumed in each region are normally
specified as
functions
of commodity
price. The functions
are
estimated
econometrically
by separate equations.
As a simple example,
the supply for a region
could be a function
of commodity
price and a
time trend variable.
In any period,
the time
variable
is collapsed
into the intercept
term.
Alternatively,
the supply function
can be dynamic. For example,
Martin and Zwart (1975)
specified supply in each region as a function of
lagged price in that region. Quantity supplied in
each region was fixed at the start of calculations.
The calculated price in each region then updated
the quantity
supplied in the next time period.
10 (1994) 81-135
5.3. Other approaches

Ashby (1964) described
a balance
sheet approach that could easily be worked on a spreadsheet. The approach
consists of collecting
forecasts for different regions and for aggregates
by
whatever
means available.
His example
was a
forecast of the world sugar market. In countries
with good data series and existing quantitative
models,
these could be used. Countries
with
limited data would need to have their supplies
forecast
judgmentally.
Reconciliation
of direct
forecasts of total world supply or consumption
and the sum of the individual
country forecasts
would require
further
judgment.
The balance
sheet
layout
ensured
internal
consistency.
Ashbys
study was the only example
of the
method discovered.
Modeling
change as a Markov
process
has
occasionally
been suggested.
Its typical use is to
forecast the number
of businesses
of different
sizes. The first step is to estimate
a transition
probability
matrix based on historical data. The
matrix raised to successively
higher powers provides a forecast
of changes
over time. Dean,
Johnson
and Carter
(1963) provided
an early
example,
using the census data for 1950, 1955
and 1960 to predict
the size distribution
of
California
cotton farms to 1975. Dairy industry
structure,
measured
as the distribution
of dairy
farm sizes, was similarly
predicted
in Canada
[Furniss and Gustafsson
(1968)] and in Britain
[Colman
(1967)].
Colman
compared
the first
post-sample
prediction
with actual census data,
as, more recently,
did Edwards,
Smith
and
Patterson
(1985). No study was found that compared the forecast error of the Markovian
transition probability
approach with the error of other
methods.
Of competing
approaches,
only judgmental and programming
methods could work
with such a short series (minimally,
two periods).
Crom (1975) described
a systems approach,
being developed
by the USDA
for the beef
sector, in which enterprise
budgets
and a detailed specification
of the structure
of the beef
producing
sector would
be used to forecast
industry changes. The author provided no details
on how the budgets would be updated,

nor on
how they would actually be used to make forecasts.
5.4. Evaluation
The
forecasting
performance
of sectoral
models
remains
an unknown
quantity.
While
such models
are being used by government
agencies as aids to producing
official forecasts,
the raw forecasts
are not reported.
Nor is the
typical
life of such sectoral
models
known,
though it is likely to be short. Models are either
abandoned
or revised in such a way that a long
series of forecasts is unavailable.
We are left to
rely on the validation
process, and the relation
between validation
results and forecast performance is unknown.
The institutionalization
of formal quantitative
models appears to have been a struggle. They
were developed
in departments
or by teams
separate from those responsible
for the outlook
reports.
Early models apparently
were updated
once or twice, then dropped.
The researchers
who developed
the models were not responsible
for their maintenance
and regular
use. The
expense and effort required
to develop a forecasting model, to maintain
and update it and to
train a new group of people in its use were
typically
underestimated
[Hedley
and
Huff
(1985)]. The formal modelers and the commodity analysts
produced
different
forecasts.
Since
only one official forecast is released,
the different values produced
within an agency must be
reconciled.
Cluff (1990) described the process at
Agriculture
Canada.
Most comparisons
of sectoral models, including those few where forecasts are made, concern
the relative performance
of different econometric estimators.
Ordinary
least squares (OLS) is
often as good as methods developed to deal with
simultaneous
equations
bias, but there are too
few studies to draw any conclusions.
Soliman
(1971) found that three stage least squares produced the best forecasts (measured by Theils U)
in two equations
and OLS in the other two. In
year
by year comparisons,
two stage least
10 (1994) 81-135
91
squares was best in 2 years and OLS in 1. Using

simulated data with known autocorrelated
structure, Naik and Dixon (1986) found that OLS was
most accurate within-sample
but two-stage least
squares and reduced form with autocorrelation
corrected
(by Durbins
method)
were better
when forecasting.
Using
the broadest
definition
of sectoral
model, six studies have been located that compare econometric
sectoral model forecasts with
other methods
[Leuthold
and Hartman
(1981),
Kulshreshtha
et al. (1982), Park et al. (19X9),
Chen and Bessler
(1990), Vere and Griffith
(1990), Fanchon
and Wendell
(1992)].
These
constitute
about half of the methods
labelled
other multivariate
in section 7.2 where comparisons are discussed in more detail. Most of
the systems contain from two to four equations;
the largest is the 67 equation cotton sector model
of Chen and Bessler. Structural
sectoral models
were more accurate in only ten of 38 pairwise
comparisons
with other forecasting
approaches.
(If the models had been as accurate as the other
member of the pair, the probability
of 10 or less
successes
is P = 0.0025.)
For one step ahead
comparisons
(which are the vast majority),
this
result is unsurprising.
What is surprising
is that
sectoral models have not been compared at more
distant horizons, where the general belief is that
they would do better.
6. Aggregate
models
and large scale econometric
Penson
and Hughes
(1979) and Freebairn,
Rausser and de Gorter (1982) distinguish
three
classes or generations
of agricultural
industry
models. First generation
models treat agriculture
as a separate entity and often fail to link factor
demands with output. Examples
include Egbert
(1969), Quance
and Tweeten
(1972) and Yeh
(1976). These were small, highly aggregated,
stand-alone
models.
They used estimates
of
elasticities and rates of growth and inflation from
other studies. Their purpose was projection
of
agricultural
output
and prices under different
P.G. Allen
98
i I~~ernariona~ Journal of Forecasting
policy proposals. Forecasting was incidental; one

of the potential policies might have been identified as most likely.
Within the first generation, a second group of
studies could be characterized
as large scale
multisector models, essentially larger versions of
the sector models described in section 5 [including Maki (1963) and Crom and Maki (1965a)l.
An exception is Cromarty (1959), generally
acknowledged to be the first large scale econometric model of agriculture. It had disposable
personal income and the US general price level
as exogenous variables. These variables were,
however, endogenous in the Klein-Goldberger
model of the US economy. Cromartys model
could be solved after Klein-Goldberger
to
produce forecasts of output and prices for 12
agricultural commodities or commodity groups.
In second generation models, the macromodel
is first used to forecast a set of variables exogenous to the agricultural sector, such as personal
disposable income, interest rates and the consumer price index. These forecasted variables
are used to solve the agricultural system. Solution values, such as total agricultural output, are
then transmitted back to the macromodel. The
linkage is incomplete. Typically, variables such
as capital accumulation are not transmitted back.
The models often fail to include explicit variables
to represent sector policies, such as acreage
diversions or deficiency payments. Examples
Table 6
Number of sector
Type of
model
Single
Multi or Aggr.
and aggregate
Macro
micro.
exog.
vars.
43
17
studies
with current
Macro
exog.
vars.
only
No
current
exog.
vars.
6
2
5
3
exogenous
No
exog.
vars. if
linked
3
2
10 (2994) 81-135
include Chen (1977) and Roop and Zeitner

(1977). Penson and Hughes (1979) describe third
generation models as having direct or indirect
accounting of capital accumulation and financing, while Freebairn, Rausser and de Gorter
(1982) simply characterize them as having better
linkages between the domestic macroeconomy
and the international economy or the agricultural
sector.
Large scale models with from 30 to several
hundred variables are intended to describe multiple sectors of the economy. They may be informal in the sense that several models each of a
single sector or interrelated sectors (such as feedlivestock) are examined in concert and re-estimated, if necessary to remove inconsistencies. In
this situation, a large scale representation is built
from the bottom up (see section 6.1). More
commonly, formal models are designed from the
top down (section 6.2). The models of the
macroeconomy constructed by the principal business forecasting units such as Chase Econometrics, Data Resources Inc. and the Wharton
Economic Forecasting Unit are the most familiar. Kost (1981) briefly surveyed these and the
individual country models of project LINK. The
agricultural components
of these models are
usually small to non-existent.
Tables 4, 5 and 6 summarize the features of
multisector and large scale agricultural forecasting models. The tables also show comparisons
variabies
and number
that perform
Validate by dynamic
simulation?
Yes
19
11
forecasting
and testing
Make post-sample
forecasts
No
38h
II
No
9
10
Yi?S
51
14
Tests?
Yes
No
33
7
18
7
Tests? refers to summary statistics of forecast accuracy and turning point performance
in the post-sample
period.
hThree studies provide insufficient
evidence on whether or not validation
was done.
Only one after 1979.
TWO studies provide insufficient evidence on whether or not validation was done. Macroeconomic
exogenous
variables are those
e.g. personal
income,
population
and consumer
price index, Microeconomic
typically
available
from forecasting
services,
variables would need to be forecast specifically for the study. A model designed to be linked to a system may have exogenous
variables
that are endogenous
to the system.
P.G. Allen
99
with models
described
earlier.
Publication
of
both sectoral and multisectoral
models peaked in
the 1970s. The more recent
surge in single
equation
models is accounted
for by their use in
forecasting
comparisons,
a use to which the
larger models have rarely been put. In terms of
data frequency,
sectoral
models
substantially,
and multisectoral
models excessively,
rely on
annual data-too
long an interval for most private
decision
making
purposes,
though
useful for
policy analysis.
For forecasting
purposes,
both
types of models typically
require
forecasts
of
exogenous
variables.
And their creators
seem
reluctant
to test their models forecasting
performance.
6.1. Informally linked commodity sector models
The philosophies
of the agencies responsible
for agricultural
forecasting
in Australia,
Canada
and the US appear
remarkably
similar.
The
development
of formal quantitative
models also
follows similar paths and timing. From the early
197Os, agencies followed a bottom-up
approach,
building gradually more complex econometric
or
programming
models,
from single to multiple
sectors.
Development
of separate
commodity
models was piecemeal,
often overlapping.
Perhaps the most comprehensive
description
of the
process is a two volume report that appeared in
1978 [Agriculture
Canada
(1978)]. It describes
ten of the 13 structural commodity
models under
development
by, or on behalf of, Agriculture
Canada.
The ultimate goal of the bottom-up
approach
is either a single forecasting
model for all commodities
or a set of consistent
sectoral models
with formal linkages. In the 1970s the Economic
Research Service of the USDA began a two-step
process of developing
individual
sector models
which were then linked together.
Attempts
to
link sectors frequently
encountered
the problem
of variable
incompatibility.
Individual
researchers had failed to consult on variable definitions
and data sources, so the individual models had to
be redefined and reestimated.
The persistence
of
the problem
led to the construction
in the late
1970s of a common
database,
T-DAM,
or the
time series data access method

[Bell et al.
(1978)]. At the same time, the annual
linked
crop-livestock
model known as the cross commodity
forecasting
system (CCFS)
was made
operational.
Initially,
it consisted
of 133 equations for nine livestock and crop sectors, with
other sectors still to be added [Boutwell et al.
(1976)]. Several of the sectors were being operated separately
rather than being linked in a
consistent
manner.
In 1980-1981, the CCFS was
updated, respecified,
enlarged and given a policy
analysis orientation.
Equations
were added for
cotton, several milk products,
price indexes and
government
outlays. The new model, now with
360 equations,
was named FAPSIM,
the Food
and Agricultural
Policy Simulator
[Salathe et al.
(1982)].
In long-term
projections
and policy analysis,
the USDA uses results from a set of econometric
models.
The mechanical
projections
from the
models
are moderated
by judgments
from a
committee
of analysts (Paul Westcott,
personal
communication,
1993).
6.2. Formally (comprehensively)
linked models
6.2.1. Multisector models

Two groups of researchers
began work on the
livestock-feed
sectors in 1965 [Crom and Maki
(1965a), Egbert and Reutlinger
(1965)]. They
realized that there were many linkages
among
the prices and quantities
consumed
of the different meats.
And,
since about
70% of corn,
barley-grain
sorghum and oats produced
in the
US went for animal
feed, demand
for these
commodities
was a derived
demand
from the
livestock
producing
sectors.
Makis (1963) 44
equation model and the Crom and Maki (1965a)
30 equation
model of the beef-pork
industries
were the first studies on interrelated
sectors.
They were unusual in being semi-annual
models,
while most of the succeeding models were annual
(see Table 5). The latter model was simulated
within-sample
to derive operating
rules, such as
the changing
of a coefficient
or an equation
specification
when a particular
variable reaches
an extreme
value [Crom and Maki (1965b)].
Crom (1970) listed the 128 operating
rules de-
100
P.G. Allen I international Journal of Forecasting
veloped from the simulations.

He also updated
the model
and showed
graphically
how the
operating
rules improved within-sample
performance. The improved
system was used for forecasting, but no tests of forecasting
performance
were made.
The USDA has used a variety of large scale
model
systems
intended
to simulate
various
policy options,
with detailed regional and commodity breakdowns.
As well as FAPSIM,
described earlier, systems include the accountingtype POLYSIM
[Ray and Moriak (1976)], the
econometrically
based TECHSIM
[Collins and
Taylor (1983)] and its successor AGSIM [Taylor
(1990)]. Another
example is the Food and Agricultural
Policy Institutes
(FAPRI)
policy-oriented econometric
model [Brandt et al. (1991)].
These are annual models with limited application
to short-term
forecasting.
6.2.2. Linked agricultural-macro

models
The model of Cromarty
(1959), mentioned
earlier, is generally reckoned to be the first large
scale agriculturally
oriented linked model. Chen
(1977),
Roop and Zeitner
(1977) and Chan
(1981) demonstrate
second generation
models
where the agricultural
sectors are essentially addon components
to large macromodels
and are
solved
sequentially.
Because
the agricultural
sector is a small part of the total economy,
failure to feedback
sector solutions to the main
model has little impact. A few third generation
models
have
appeared
[e.g.
Penson
et al.
(1984)]. The Freebairn,
Rausser and de Gorter
(1982) model, in addition
to linkages with the
macroeconomy
and international
markets,
also
contains reaction functions that endogenize
policy.
The ORANI model of the Australian
economy
[Dixon et al. (1982)] is a structurally
detailed
computable
general
equilibrium
model that is
unusual
in its detailed treatment
of agriculture.
There are four geographically
distinct multiproduct agricultural
industries
and four type-of-farming industries for a total of ten commodities.
The
entire model has 103 other sectors, plus noncompeting
imports
for a grand total of 114
10 (1994) 81-1.75
sectors [Higgs (1986)]. Imports

determined
endogenously
and
reclassified between endogenous
The model has been used for
although forecasting
is possible.
and exports are

variables
can be
and exogenous.
policy analysis,
6.3. Evaluation of large scale models

In 1961, in reference to both sectoral and large
scale models, Cromarty
could observe (1961, p.
365), We are in the infancy stage of estimating
the economic
interrelationships
among agricultural commodities.
With increasing
computing
power and longer post-war data series, agricultural economists
seized on the excitement
of
more comprehensive
modeling
of agriculture.
Although
the early developers
of large scale
macroeconomic
models regarded forecasting
as a
major objective,
much of the work with agricultural models was concerned
with structural specification, estimation
techniques
and policy simulation. Only occasionally
did forecasting
appear to
be a goal. Even less often was anything
more
than rudimentary
testing of forecasting
performance considered.
Questions
of usefulness
and
comparative
performance
of large scale models
were rarely addressed,
at least in print.
Improved
specification
and model testing are
closely linked. Sometimes
formal testing is not
required.
Around
1972-1973,
agricultural
prices
in the US rose dramatically,
surprising
everyone
and dismaying
forecasters.
Changes in US farm
combined
with rapid
inflation,
small
policy,
crops and rising export demand,
converted
the
US farm economy
from a relatively
closed system to a relatively
open one. Forecasters
concluded
that
their
models
were
inadequate
because
they failed to consider
the impact of
international
markets
on US prices [Rausser
(1982)]. Rapid inflation,
at different
levels in
different
nations,
meant that price forecasts
in
nominal terms were impossible.
The price shocks
of 1972-1973
marked
a
watershed
in the development
of international
commodity
models. Before that time, researchers in the US had made little progress in improving the forecasting
performance
of international
commodity
models
[Labys
(1975)].
Between
1976 and 1980, a series of conferences
was held
among representatives
from the USDA, Agriculture Canada,
commercial
forecasters
and academics [Rausser (1982)]. Greater dependence
on
world markets had forced Canadian
researchers
to address
the issue of international
impacts.
Competition
forced commercial
forecasters
to
improve the performance
of their product. The
USDA lagged behind.
Without
the feedback
from striking
events,
agricultural
forecasters
continue
to suffer from
two major handicaps:
lack of a common maintained
model
and inadequate
test protocols.
These are among the criticisms that Fildes (1985)
levelled
at quantitative
forecasters
in general.
While economic theory is some guide to specification,
it is silent on many practical
issues,
especially
dynamics.
For example,
supply of a
commodity
is a function of commodity
price and
input prices. But what about competing
products? What about constraints
on rate of adjustment to price changes?
There is no reference
specification,
for example
for corn
supply,
against
which possible
improvements
can be
tested. Because there is no accepted cumulation
of past research,
it is impossible
to take all
previous work into account.
Soon after sectoral
and large scale models
became popular, various commentators
began to
assess the progress that had been made. They
found
much to be dissatisfied
with. Shapiro
(1973, p. 255) noted that
almost all model evaluation
procedures
to date
have employed non-stochastic
simulation
(with
respect to both equation
error term and the
sampling distribution
of the estimated parameters) to generate the experimental
parameters
- a procedure
which is inadequate
in testing
dynamic theories.
The comment
is still true. Stochastic simulation would not address the predictive
performance where
it depends
on contemporaneous
exogenous
variables.
While the last two decades have seen many
new model test procedures
appear, actual use of
the methods
does not appear to have greatly
improved.
In the context of agricultural
trade
101
modeling,
Thompson
and Abbott
(1982) noted
that, of the few modeling
exercises that listed
forecasting
as an objective,
almost none provided any forecasting measures outside the range
of the data used to estimate the model. Improvement is still needed,
both in agricultural
sector
models and in large scale models in general.
Fildes (1985) recommended
that models be tested for ex ante performance
relative to extrapolative or judgmental
alternatives,
a view held by
leading
forecasters
since the late 1970s. Just
(1993) in his conclusions
and a call for action
asks for a reduction
in the emphasis on standard
statistical concepts of fit. He notes (p. 37) [tlhe
crucial criterion
for forward-looking
analysis is
the ability to represent
out-of-sample
phenomena.
Cromarty
and Myers (1975), speaking
from
the viewpoint of industry, questioned
the usefulness of annual price forecasts. As Table 5 shows,
about two thirds of aggregate
and large scale
models are annual. They also found the complex
simultaneous
equation
models of little use in
short-term
decision making. In most cases, they
found that an endogenous
variable
could be
better determined
within a sub-system
rather
than simultaneously
within a system.
Table 6
shows that most large scale models
require
forecasts of exogenous variables, although in this
respect they are relatively
better than sectoral
models.
Outlook forecasting
at the USDA is a complex
and diffuse process without an overriding
formal
approach
[see Bell et al. (1978)]. Single and
multiple equation econometric
models, statistical
analyses of survey data and analyst judgment
are
combined
to produce the official forecasts.
For
longer horizons, forecasters place relatively more
emphasis on econometric
models (Paul Westcott,
personal
communication,
1993). A series of US
General
Accounting
Office reports has recommended that the USDA document its forecasting
procedures
[US General
Accounting
Office
(1988)
p. 76, (1991)
p. 581. The
recent
documentation
of farm income forecasting
is a
first step [Dubman
et al. (1993)].
On the other hand, Agriculture
Canada claims
that its Food and Agriculture
Resource
Model
102
P.G. Allen
(FARM)
is one of the few being operated on a
continuing
basis within
a successful
outlook
program
[Hedley and Huff (1985)]. It is updated each quarter and used to produce forecasts
for up to 6 years ahead. After the results have
been reviewed,
the model is calibrated,
if necessary, by reverse simulation
[Cluff (1990)]. This
process maintains
internal consistency
while achieving forecasts that are judged acceptable.
Australia has had an aggregate
recursive
program
available since 1976 and the model has been used
for 5 year projections
[Kingma et al. (1980)].
Few comparative
studies of the forecasting
performance
of large scale models have been
located.
Just and Rausser
(1981) found that
futures prices were more accurate predictors
of
eight agricultural
commodity
prices one to three
quarters
ahead than were four major private
forecasters
and the USDA (in that order).
In
three studies [Roop and Zeitner (1977), Stillman
(1985), Westcott
and Hull (1985)], Theils U,
statistic was greater than one in more than half
of the variables
forecast in the post-estimation
period (79 of 161). Results within-sample
were
much better.
There is every reason to believe
that these findings
are typical of large scale
models.
Do large scale models
have a use? Their
makers would argue that they are intended
for
policy simulations,
not for forecasting.
But can
their conclusions
be trusted? Models would have
greater credibility
if, once a policy was enacted,
the forecasts
produced
by analysts
were conditioned
on the given policy variables.
7. Time series models

Deterministic
trend extrapolation
was an early
form of time series analysis,
probably
widely
used in institutional
forecasting
though
little
reported
in the literature.
In the 1960s interest
in the hog cycle led to the use of harmonic
analysis,
in which production
and price of hogs
functions
[Larson
were
modeled
as cosine
(1964)].
10 (1994) 81-135
7.1. Use of time series methods in agricultural

forecasting
Jarretts
(1965) forecast
of Australian
wool
prices using exponential
smoothing
marked the
first application
of modern time series methods
to agriculture.
For agricultural
economists
in the
US, the era of time series analysis began in 1970
with the appearance
of an article illustrating
the
Box-Jenkins
and exponential
smoothing
methods [Schmitz and Watts (1970)]. Although
intended as a demonstration,
by reporting
proper
post-sample
forecasts the article set a standard
that was not followed for many years. Exponential smoothing
produced the more accurate forecasts. In contrast to business forecasting
practice,
exponential
smoothing
has practically
never
since been used for agricultural
forecasting.
Articles on spectral analysis began to appear
at the same time [Rausser
and Cargill (1970),
broiler cycles, US; Weiss (1970), world cocoa
Cargill
and Rausser
(1972),
futures
prices;
prices; Hinchy (1978), lead-lag
relation between
export and Australian
saleyard prices of beef].
The intent was to explain historical data patterns
rather than to forecast. A demonstration
of the
use of multivariate
cross spectral
analysis
followed [Ahlund et al. (1977), beef price]. In the
198Os, interest in multivariate
time series analysis
became evident.
Shonkwiler
and Spreen (1982)
used a transfer
function
to analyse
the much
studied
relation
between
the number
of hogs
slaughtered
in the US and the hog-corn
price
ratio. Again, their interest was to confirm what
had already been shown by spectral analysis, the
existence of a cycle of about 3.4 years.
At about this time, Bessler introduced
vector
autoregression
(VAR) to the agricultural
economics
profession.
His 1984 article
[Bessler
(1984a)] provided
a good explanation
of the
basic approach
without
dwelling
on the overparameterization
problem.
A series of articles
introduced
various parameter
reduction
methods
[Brandt and Bessler (1984), Tiaos exclusion
of
variables
method;
Bessler and Hopkins
(1986),
symmetric
and non-symmetric
random
walk
Bessler
and
Kling
(1986),
general
priors;
P.G. Allen
and Leuthold (1986) overcame the problem with

a 4 x 4 contingency
table that distinguished
between peak and trough turning points. In a one
step ahead forecast,
the distinction
is unnecessary since actual data will reveal whether
the
series is rising (with a potential
peak about to
occur) or falling, though a forecaster
might be
concerned
about the error rate of predicting
peaks compared with that of predicting
troughs.
Only for several steps ahead forecasts
is the
larger table really necessary [Kaylen and Brandt
(1988)].
Bayesian
priors].
Bessler
also pioneered
the
commendable
practice of providing comparisons
among methods based on post-sample
forecasts.
Kaylen (1988) provided
a review of parameter
reduction
methods,
including
both exclusion of
variables
and Bayesian
techniques.
He also introduced
a new exclusion of variables approach
that is similar to Hsiaos method but allows for
deletion of insignificant
intermediate
lags.
Turning
point measures
have fascinated
agricultural
economists,
perhaps
because
microeconomic
theory emphasizes
direction
of effect
over quantity of effect. Since the standard 2 x 2
contingency
table only distinguishes
a change in
direction from no change, a forecast of a peak (a
rise followed
by a fall in the series) will be
counted
as correct when the actual series displays a trough (a fall followed by a rise). Naik
Table 7
Success rates
of different
Naive
N
A
ou
EX
EC
VA
OM
CS
co
Success
rate
ARIMA
15
23
methods
in pairwise
Other
33
26
0.39
0.59
0.36
0.51
0.00
0.54
0.76
0.58
0.70
0.64
0.63
0.27
0.43
0.33
_
0.26
0.04
0.30
0.30
0.40
0.54
univar.
23
8
comparisons
Expert
15
14
9
27
10
24
7.2. Evaluation:
comparisons
7.2.1. Accuracy
After the pioneering
(1970) no comparisons
of ex ante forecasting
Econ
24
23
13
6
103
VAR
23
10
17
8
0
35
8
0
0
performance
Other
1
20
16
10
1
7
12
0
12
6
22
study of Leuthold
et al.
of agricultural
forecasts
multvar.
6
7
0
8
3
12
Composite
Total
Simole
Other
9
15
0
I1
4
0
6
1
14
2
17
3
0
0
32
0.00
0.11
0.43
0.00
0.60
0.28
0.35
0.00
0.67
0.10
0.46
0.65
_
_
0.22
0.00
0.37
0.31
0.46
0.36
0.56
0.33
0.65
26
35
9
29
35
0
21
26
33
17
31
20
0
4
54
Better
Worse
104
162
63
107
71
70
42
187
185
155
138
142
124
125
55
84
99
69
0.73
The upper triangular

matrix is a better than/worse
than set of pairwise comparisons.
For example, the first entry is interpreted
as the row entry method (Naive) is better than the column entry method (ARIMA)
in 15 pairwise comparisons
and worse than
ARIMA
23 times (in a total of 38 comparisons
from various studies). Better usually means lower one step ahead forecast root
mean square error. Sometimes results are only presented with RMSE over a range of forecast horizons. Sometimes only MAPE is
reported.
The lower triangular
matrix is the success rate, or proportion
of total pairwise comparison
in which the column entry method is
better than the row entry method. The value is found by dividing the number of times with better than comparisons
by the total
number
of comparisons
for each pair of methods.
A dash indicates
that the methods
have never been compared.
The
interpretation
is inverted.
For example, the first entry, 0.39, which is 15 divided by 38, is the success rate of the column entry
method (Naive) over the row entry method (ARIMA).
The bottom row is the overall success rate for the column entry in all
comparisons
(for example, 0.40 for the Naive method).
The better than/worse
than comparison
is done as follows. Each member of a group is compared
with each method not in the
group but not with other members
of the group. For example,
if a study ranks the methods
as follows; (1) composite,
(2)
econometric,
(3) ARIMA,
(4) different econometric,
then the pairwise orderings considered
are (1,2), (1,3), (1,4), (3,1), (3,2),
(3.4) and (2,l). (2.3). (4,1), (4,3). In terms of (x, y) pairing, these are recorded as composite
(3,0), ARIMA (1,2), econometric
(1.3).
The example is illustrated
in detail in Table 7a. Table 7b collects Table 7a information
into the form used in Table 7b.
104
(Footnotes
Table 7a
to Table
7. continued)
Table
Composite
Pairing
Composite
ARIMA
1.2
1.3
1.4
1.0
1 .o
kl
2.1
3.1
4.1
O,l
3.2
0.1
1,O
3.4
4.3
18
0.1
1,2
1,3
3.0
Econometric
Total
B/W
130
2,o
1,l
38
1.2
Comp
ARIMA
1.00
Econ
(1)
1.00
0.5
Overall
(2)
1.00
(2)
0.33
0.25
(3)
(3)
(4)
O,l
18
ARIMA
Econometric
2,3
B/W
7b
appeared until almost the 1980s. Table 7 summarizes the comparative

forecasting
accuracy
of
nine methods or groups of methods.
The comparisons are based on forecasts of 129 agricultural series reported
in 49 studies. Because studies
typically compare
only two or three methods,
Table 7 summarizes
pairwise comparisons
of the
different
methods.
The upper
triangle
shows
(~,y) pairs: the method listed on the left of the
row was more accurate than the method listed in
the column heading in x comparisons
and worse
in y others. Symmetric
off-diagonal
elements of
the matrix
contain
the same information
in
reverse order, so the lower triangle would convey no new information.
Instead,
the lower
triangle has been used to report the success rate
between
pairs of methods.
The value in row i,
column j is the proportion
of times the method
in column j is better than the method in row i in
terms of the criterion
used in the study. For
example,
ARIMA
beats other
univariate
26
times in 34 pairwise
comparisons,
achieving
a
success rate of 0.76. This information
can also be
expressed
in reverse
order.
Since other univariate beats ARIMA
eight times in 34 comparisons,
its success rate is 0.24 or (1 - 0.76).
The final row of Table 7 is the overall success
rate of forecast accuracy of the method listed at
the column heading against all others. For example, the naive method is more accurate in 104
out of a total of 259 pairwise comparisons,
a
success rate of 104/259 or 0.40.
The (root) mean square error ((R)MSE)
was
used to rank methods, when the study reported
it. In the 5% of studies that failed to present the
1.3
MSE, Theils U statistic or the mean absolute

percentage
error (MAPE) was used to make the
pairwise comparisons.
Choice of criterion
matters, and RMSE, while the most popular,
is not
the most consistent
criterion
for choosing
the
best method
[Armstrong
and Collopy
(1992)].
Comparisons
between pairs of methods need to
be made with caution,
since the number
of
observations
is frequently
small. Very approximately,
the 90% confidence
interval
for ten
comparisons
is 0.3, for 20 comparisons
0.2, and
for 40 comparisons,
0.125.
Even after grouping
methods together,
there
are many gaps. A notable
omission
is a comparison of vector autoregression
with any form
of composite
forecast. The most accurate method was other composite
(with weights calculated
adaptively
or from ratios of variances
or by
regression).
Next was simple composite
(with
weights calculated
as simple averages).
The success of composite
or combining
methods
is a
result that conforms
with widely held beliefs.
More surprising
is that complex
methods
of
calculating
weights performed
relatively
better
than simple averaging
(based on 11 series in
seven studies).
The previous
statement
needs
some qualification.
The typical study compared
three to five composite
methods,
one of which
was simple
averaging.
Simple
averaging
was
typically
better than some of the composites,
though rarely the best. But the studies provide
insufficient
cumulation
of evidence to favor any
particular composite method over simple averaging.
VAR was the best single method,
perhaps
because it faced relatively weak opposition
most
P.G. Allen
I International Journal
of the time. But 55 of the 125 pairwise VAR

comparisons
were
with ARIMA
models,
a
competition
that ARIMA won 64% of the time.
This result would be unsurprising
if VAR was
regarded
as a causal method.
But one of the
criticisms levelled against it by econometricians
is that VAR is atheoretical.
Econometric
(single
equation)
and other multivariate
methods (transfer function,
state space or structural
equation
systems)
do slightly worse than the naive no
change forecast,
with other univariate
methods
(trend extrapolation
and exponential
smoothing)
coming off worst. The poor showing of econometric methods is in contrast to the finding in
Fildes
(1985)
survey
that compared
causal
(econometric
and transfer
function)
and extrapolative
(ARIMA
and exponential
smoothing) methods.
There, the success rate of causal
methods
in short-term
ex ante forecasting
was
0.67, based on ten studies performed
between
1974 and 1984.
A number of criticisms can be levelled at the
results. A study that compares a large number of
methods tends to dominate the ratios, because it
permits more pairwise comparisons.
The methods may represent
minor variations,
for example, different
combinations
of methods
in a
composite
forecast.
On the other hand,
the
single study should lead to the same conclusions
as a number
of separate
studies that use the
same series. The same hog price series (over
almost the same time interval) was used by about
ten of the studies.
The strength
of the competition
obviously
matters.
For example,
the state space approach
in the competition
organized
by McIntosh
and
Dorfman
(1990) performed
rather badly relative
to two strong methods:
a VAR approach and an
alternating
conditional
expectations
approach
estimated
by Berck and Chalfant (1990). (Alternating
conditional
expectations
is a form of
regression
analysis that uses a smoothing
algorithm to find the best transformation
of each
variable.)
How would the methods have fared if
the competition
had been equal? That is, if each
comparison
had consisted
of the same total
number
of pairs? The answer is found by calculating
the simple average of all the success
of Forecasting 10 (1994) 81-135
105
rates for a given method.

Rates for some pairs
are unknown
or are based on very few comparisons. The success rate of 0.50 (equal ability)
was arbitrarily
assigned
where
less than ten
comparisons
existed between a pair of methods.
The ordering
of methods
is essentially
unchanged.
Only other multivariate
methods perform worse than naive methods,
but only VAR
and ARIMA
are markedly
better.
7.2.2. Turning points
Forecast accuracy was the commonest
criterion used in comparing
methods. A smaller number of studies reported
turning
point performance. Table 8 summarizes
comparisons
from 41
series reported
by 13 studies [Freebairn
(1975)
contains
almost half the series but makes only
one pairwise comparison
of each]. Conclusions
are similar to the forecast accuracy comparisons.
Again, VAR and the composite methods perform
best. Few comparisons
with the naive method
were located.
Turning
point comparisons
need to be interpreted cautiously for two reasons. First, the even
smaller
number
of observations
than for the
forecast accuracy comparisons
makes their ability to rank methods even less powerful.
Second,
the choice of criterion
is important
here also.
The commonest
criterion is number of directional changes correctly forecast. For horizons more
than one step ahead, the starting direction must
be forecast and the forecast may turn out to be
incorrect.
If so, the criterion counts as correct a
forecast directional
change the reverse from the
actual change, for example,
a forecast peak (a
move upwards then downwards)
where an actual
trough occurs.
Three authors have examined an identical data
set using the same seven forecasting
methods
(Table 9). For one step ahead forecasts the key
difference
between
Brandt and Bessler (1981)
and the improved
method proposed
by Kaylen
(1986) is that Kaylen compared
forecast change
with preceding
actual change,
whereas
Brandt
and Bessler used the forecast change.
At the
time of forecast, the preceding
actual change is
known, so that certain forecast possibilities
are
eliminated.
A previous price increase, for exam-
Overall success rate
0.46
_
0.40
0.53
0.40
0.69
0.38
0.42
0.33
0.33
0.58
1.00
0.38
0.55
0.64
0
4
6.5
0
0
0
0
Expert
points
Other univar.
turning
ARIMA
performance:
1
6
13.5
0.38
_
0.56
0.40
0.04
0
9.5
0
7
ECOIl.
1000
8.5
0
4
0.90
0.96
_
2
0
002
0
VAR
3
0
0.13
0.00
0.00
4.5
23
5.5
0
Other multi
0.69
60
0.58
00
0
1
0.35
00
15
00
10
21.5
0
Y
0
6
14.5
0
2.5
0
0
3.5
Simple
Composite
6
0.5
5.5
Other
4
13
0
7,s
0
5
12.5
0
36.5
6.5
41.5
33
26
7
59.5
42
Total
B/W
3
42.5
13.5
29.5
54
3
45
42.5
19
See the footnotes to Table 7. The upper triangular matrix is the number of better than/worse
than comparisons.
The lower tnangular matrix 1s the success rate, read in the
same way as in Table 7. Because turning point measures for different methods often score the same value. those methods tie in the rankings. A tie between two methods
receives a better than/worse than score of 0.5. 0.5. Various turning point measures were used in the different studies. the commonest being the ratio of turning point errors to
total number of changes.
0.00
0.00
0.00
0.00
Naive
of ex ante forecasting
VAR
Other multi
Camp. simple
Comp. other
Econ
Naive
ARIMA
Other Univar.
Expert
Table 8
Comparison
P.G. Allen I International Journal of Forecasting 10 (1994) Xl -135
Table 9
Rankings
of different
Author
Brandt.
Kaylen
one step ahead
Error
measure
Bessler
McIntosh,
Dorfman
turning
point
measures
(1)
Econometric
on the same methods

(2)
ARIMA
(3)
Expert
and data
107
series
Composite
Simple
Simple
(1) (2)
(1) (2) (3)
Min. var.
Adaptive
weights
Correct/total
Separate peak,
trough
Ratio accurate
forecasts
Henriksson-Merton
7
4=
1
7
3=
4=
5
l=
6
I=
2
4=
3=
4=
6
7
7
4=
2
l=
3=
l=
1
4=
5
I=
3
Number
correct
1=
6=
6=
l=
3=
3=
1=
P
Number
down
correct
3=
l=
3=
l=
3=
3=
30
6=
30
6=
18
4=
13
2
14
3
18
4=
12
21
6
11
4
9
2
10
3
12
5
Sum of ranks
Ranking
Sum of ranks excluding
Ranking
correct
up and down 22
7
l=
All studies use the data series for hog prices (price of barrows and gilts at seven terminal markets) and forecasts from Brandt and
Bessler (1981). An almost identical data set and results are also found in Bessler and Brandt (1981). The original article contains
an error (noted by Naik and Leuthold,
1986) that when removed increases by one the number of correct forecasts for the simple
composite
of two methods.
This adjustment
is reflected in the rankings.
In Brandt and Bessler, a turning point is forecast when (F,.,_, - F,_, ,,_*) X (F,, ,I, - F,,,_, ) < 0 and the forecast is correct when
(F, - F, 1) x 67 / , ~ F,) < 0 where F,,,_, is the (one step ahead) forecast for time t made at time t - 1. Since the first part of the
expression
is known at the time of the forecast, Kaylen (1986) modified theformulato(F,-F,.,)x(F,_,,,-F,)<O.
Ina2~2
table of directional
change and no change, both forecast and actual. the sum of the diagonal elements is the number of correct
forecasts.
McIntosh and Dorfman (1992) use the procedure
of Naik and Leuthold (1986) to construct a 4 x 4 table that separates
peaks. upward movements,
downward
movements
and troughs. For a one step ahead forecast,
the known value of (F, - F,_,)
eliminates certain off-diagonal
elements from consideration.
For example, a previous upward price movement
limits the forecast
to a peak turning point or a continuing
upward movement.
The ratio of accurate forecasts (RAF) is the sum of the diagonal
elements divided by the total number of forecasts.
For one step ahead forecasts,
the RAF has the same value in both 2 x 2 and
4 X 4 contingency
tables. The Henriksson-Merton
measure is the conditional
probability
of a correct forecast.
McIntosh
and
Dorfman
calculate an exact confidence
level based on the hypergeometric
distribution
as
where N, is the number of downward

observations,
N, is the number of upward observations,
N = N, + N,, n, is the number of
correct downward
forecasts
and nz the number of incorrect
downward
forecasts
and n = nI + rr2. The sum of the number of
correct
upward
and downward
forecasts
is the same as the values calculated
by Kaylen,
so that for overall ranking
the
disaggregation
adds to new information.
ple, can only be followed

by a further
move
upwards or a peak-type
directional
change. The
summary
statistic,
ratio of accurate
forecasts,
maintains
the rank ordering since it provides no
new information.
But the Henriksson-Merton
confidence
intervals
reported
in McIntosh
and
Dorfman
(1992) lead to different rankings, even
though broad similarities
do occur.
7.2.3. Vector autoregression

methods
Six studies that compared
vector autoregression methods are reported in Table 10. As noted
by Kaylen (1988), unrestricted
VAR models with
large numbers of parameters
have been found to
perform
rather poorly. The variable
reduction
methods
that use variable
ordering
and information
criterion
statistics
produce
the most
P.G. Allen
108
Table 10
Pairwise comparison
Author
Date
of vector
Series
autoregression
Criterion
and horizon
methods
Unrestricted
Variable
Tiao-Box
reduction
Hsiao.
Bessler,
Babula
1987
RMSE
1.2.6,12
7.8
Kaylen
I)88
RMSE
TPE
l-8
[41
ISI
111
Kling,
Bessler
1985
RMSEI
MAPEI
RMSE4
MAPE4
I,4
0.5
5,O
4.0
4,4
3,s
2,s
2.6
5.0
s,o
2.3
2.3
Park
1990
RMSE
I .3.6
[31
Zapata,
Garcia
1990
RMSE
1-6
TPE
l-6
uo,3
d3.0
u0.3
d1.2
MSE
l-58
5.1
Fanchon.
Wendell
I992
10 (1904) Xl -13.5
Prefilter
(Parzen)
Schwartz
Bayesian
Symmetric
General
VAR
overall
best
Yes
8.7
131
0.5
l,3
1.4
1.4
111
PI
n.a.
4,l
4.1
3.1
4.0
No
No
No
No
PI
Yes
U2.l
dl.2
Yes
U2.1
Yes
d3 ,O
1,s
6,o
2,x
Yes
Bessler and Kling (1976) used an almost identical data set (the forecast period was extended a further 12 quarters)
and found
that the ordering of accuracy was general Bayesian prior, unrestricted,
symmetric
Bayesian prior.
The values b,w indicate the number of pairwise comparisons
that the method listed at the head of the column is better than and
worse than other methods examined. Where this information
could not be extracted from the study. the values in brackets [thus]
indicate the ranking of the methods according
to the criterion listed.
The method of Tiao and Box is to delete insignificant
variables.
with re-estimation
and repeated
deletion if necessary.
Khng
and Bessler (1985) use both r-test and F-test statistics to delete insignificant
variables.
Their performance
was similar with
one-step
ahead forecasts
but the t-test method was worse at four-steps
ahead. Hsiao and Schwartz methods examine different
combinations
of lagged variables in each equation.
usually after judgementally
ranking the series in order of causality.
Parameter
weighted
information
criteria (Akaike,
Schwartz) are used to find the best set of lags.
The prefiltering
method (Parzen) uses the residuals from univariate
ARIMA
models applied separately
to each series.
In Zapata and Garcia (lY90), u is undifferenced
(raw) data and d is first differenced
data.
Elizak and Blisard (1989) found that Hsiaos method was generally slightly more accurate than Kaylens for five retail meat series
at one, four and eight quarters
ahead. Both were more accurate than USDA-ERS
forecasts.
accurate
forecasts
(Hsiao and Schwartz
methods), followed by Bayesian models with general
prior distributions.
Park (1990) reports a x2 test
of forecasting
ability.
He found no difference
among methods for one step ahead forecasting,
though the differences
were significant for longer
horizons.
ists. because of their historical emphasis on the

analysis
of resource
allocation
decisions,
are
perhaps more likely to emphasize
this area than
are other forecasters.
This, and a number
of
other practices that have been criticized in earlier sections, are areas where improvements
need
to be made.
8. Current
8.1. Probability
developments
and conclusions
A much-needed
development
is to combine
forecasting
with decision making (the so-called
decision
support system). Agricultural
econom-
Decision
probability
distribution,
forecasting
makers
want information
on the
distribution
of a point forecast. The
or the statistics that summarize
it,
provides information
on the precision the forecaster attaches to the point forecast. Equally,
a
decision
maker can see the risk that attends
taking the point forecast as true. Analysts
responsible
for outlook forecasts have recognized
the uncertainty
of the forecast in a qualitative
way. Outlook
reports,
from the earliest to the
present
day, contain verbal descriptors
such as
expected to return to norshould be around,
mal levels later in the year and so on. Such
descriptors
convey only part of the information
possessed
by the commodity
analysts.
Bottum
(1966) and Timm (1966) both recommended
that
probabilistic
outlook forecasts be developed,
in
the manner of weather forecasts. Nelson (1980)
outlined
a specific proposal
that included
a
survey of user needs, development
of elicitation
procedures,
training,
forecast
evaluation
and
dissemination
of results.
Many studies have reported
subjective
probability
distributions
elicited
from farmers
for
future prices and yields. Generally,
no actual
payoffs are made for forecast accuracy. Grisley
and Kelloggs (1983) study is an exception. When
actual rewards are used to motivate individuals,
choice of scoring rule might be important.
The
linear scoring rule used by Grisley and Kellogg
(1983) is easy to interpret
and explain to participants.
However,
since the amounts of money
were relatively
large (up to one days pay) and
the respondents
were risk averse,
the linear
scoring rule was improper
(so that the reward
structure
gave participants
incentives
to misrepresent
to the researcher
their true subjective
probabilities).
A comment
on the paper suggested that such a rule could lead to strategic
behavior.
Respondents
could maximize
their
expected
reward by stating more concentrated
probability
distributions
than
they
actually
believed.
In a practical
setting,
the goal is to obtain
subjective
probabilities
which are as accurate as
possible. Payment of cash rewards might matter
much more than choice of scoring rule. Nelson
and Bessler (1989) provided the same historical
information
to a sample
of participants
and
asked each to forecast a series of 40 probability
distributions.
The respondents
who were paid
10 (1994) 81-135
109
according
to an improper
scoring rule initially
stated the same probability
forecasts
as those
paid according to a proper scoring rule, but after
about 20 successive
forecasts
the two groups
diverged. While a reward encourages
participants
to take the task seriously, basing payments on an
improper
scoring rule ultimately
leads to biased
assessments.
More common
in the general forecasting
literature
are attempts
to mechanically
calculate
correct (i.e. well calibrated)
forecast probability
distributions.
The problem
was recognized
in
agricultural
forecasting
in the late 1970s [Teigen
and Bell (1978a,b),
Spriggs (1978)]. Their confidence intervals on corn price, based on a sector
model, did recognize uncertainty
in the values of
both the parameters
and the explanatory
variables. Little follow-up
work appeared.
Prescott
and Stengos (1987) demonstrated
the bootstrapping approach
by constructing
confidence
intervals for pork production
forecasts.
No calibration tests were performed.
The first testing of
this kind to take place in an agricultural
context
was by Bessler
(1984b).
A handful
of other
agricultural
applications
have appeared
since: in
a policy context [Bessler and Kling (1989)] and
comparing
univariate
and multivariate
[Bessler
and Kling (1990)], based on option prices of
commodity
futures
[Fackler and King (1990)].
Knowledge
of the option premium
and an assumed lognormal
distribution
enabled
Fackler
and King to calculate
an artificial probability
distribution
on the futures price 4 weeks and 8
weeks ahead.
Why has probabilistic
forecasting
received so
little attention,
despite the fact that the need for
it was recognized
almost 30 years ago? Outside
of weather
and sports forecasting,
the same
question
could be asked about
any kind of
forecasting.
Most likely, shortage of data is the
problem.
Making and testing probabilistic
forecasts requires
more data than does point forecasting. Compared
with daily or more frequent
weather
forecasts made at many locations,
the
typical economic
price series of monthly,
quarterly or even annual frequency offers many fewer
opportunities.
A reviewer suggested that probabilistic forecasts are more challenging
to present
than are point forecasts. This is perhaps indirectly saying that a forecast needs to make sense to
the recipient
in a decision
making context,
a
second area of current development.
8.2. Forecasting
and decision
making
Quite early in the development

of the theory
of decision
making under uncertainty,
the outcome using perfect information
and the outcome
using a frequency
distribution
from a historical
series were compared.
The difference
gave the
value
of perfect
information.
The difference
between
having no predictive
information
about
the outcome
as opposed
to some predictive
information
was not often put in the forecasting
context,
though
there were exceptions
[Lave
(1963), Eidman et al. (1967), Bullock and Logan
( 1970), DeCanio
( 198O)j.
Some studies focussed explicitly or implicitly
on a risk neutral decision maker. Such a person
would
be unconcerned
about
the probability
distribution
around
a forecast,
except for bias.
Consider,
for example, the producer of a (fourth
quarter)
beef calf who must choose between
immediate
sale, or rearing for sale as a feeder
steer (in the second quarter
of the following
year) (Spreen
and Arnade
(1984)].
To attain
maximum
profits, if the feeder steer price exceeds a break-even
value, the correct decision is
to retain the calf, otherwise
it should be sold.
Spreen and Arnade compared forecasts of feeder
steer prices by five different methods,
including
one that forecast the probability
of feeder steer
price exceeding the break-even
price. When each
season had passed, the correct decision (the one
that gave the greater profit) could be seen. In
this study.
the forecast
from an exponential
smoothing
model gave the fewest wrong decisions. The highest expected
profit might carry
too much risk for a risk averse producer
who
might elect to sell calves more frequently
than
the expected
profit maximizer.
A risk averse
producer
would want to know how precise each
of the forecasts was.
Even studies that compare
decision
makers
with different risk preferences
usually ignore the
forecast
error distribution.
Rister,
Skees and
Black (1984) examined a similar situation, where
a grain producer
with a known cost of storage
had to choose each month between
storage or
immediate
sale. Whether
outlook
price information was available
or not, the strategy with
highest expected return and highest risk was to
store for 3 months,
then sell. Under
these
conditions,
a risk neutral decision maker would
pay nothing
for outlook
information.
For a
moderately
risk averse
decision
maker,
the
strategy with highest expected return and acceptable risk required
outlook information.
Requiring a payment
from the farmer of $450 for the
outlook information
removed that strategy from
the non-dominated
set, providing
an indication
of the value of outlook
information
to that
producer.
When futures markets exist for a commodity,
a producers
hedging decision can be formulated
as a portfolio
analysis problem.
Early researchers simply used historical data as risk measures.
Peck (1975) calculated the optimal hedge for egg
producers
using the forecast error variance
of
three forecasting
methods (one of which was the
futures price itself). Forecast information
was of
little value, since a fully hedged strategy gave
almost the same returns
and risk reduction
as
partial
hedges based on the forecasts.
Brandt
(1985) and Park, Garcia and Leuthold
(1989)
considered
how producers
and buyers of hogs
might execute selective hedging strategies based
on prices forecast
by different
methods.
In a
selective hedge, the producer (buyer) sells (purchases) a futures contract when the forecast price
is below (above)
the futures
price, otherwise
doing nothing.
Brandts results suggest that the
adaptively
weighted composite
forecast is better
than the simple average composite,
econometric
and ARIMA
models,
although
with quarterly
data the analysis is probably too aggregative
for
useful decision making. Park et al. (1989) used
monthly data. They found. perhaps surprisingly,
that ARIMA
forecasts
performed
well at all
horizons and for all stochastic dominance
criteria
against simple composite and econometric
model
competitors.
P.G. Allen
I International Journal qf Forecasting IO (1994) Xl -13
8.3. Conclusions
Agricultural
forecasting
uses a wide range of
techniques
in a wide variety of situations.
The
largest group are outlook
forecasts,
mainly of
production,
at different
national
and regional
aggregations.
They have a long history and a
detailed and specialized
development
of leading
indicator
analysis
unique
in forecasting.
Emphasis, indeed one might say overemphasis,
on
on econometric
modeling
of ever increasing
complexity
has been a hallmark
of agricultural
forecasting.
It stems, perhaps,
from the desire
and the training
of agricultural
economists
to
explain
phenomena
rather
that predict them.
Often, analysts make conditional
predictions
or
projections
based on assumptions
that are oversimplifications
of any policy that might arise. The
ratio of policy analysis to long-term
forecasting
appears higher in agricultural
applications
than
elsewhere.
If this review appears to have concentrated on short-term
forecasting,
it is because
few published
long-term
forecasts were located.
Results found here conform generally
to the
beliefs held by forecasters.
The conclusions
are
drawn
from published
studies
and there are
many unpublished
forecasts. Where conclusions
are based on relatively few results, the addition
of a small number of studies might reverse the
findings. Composite
forecasting
is best, although
(as noted in section 7.2) the case for using simple
averaging
over other composite
methods is less
clear. There are too few comparisons
to single
out a particular
composite
method as best. For
short-term
production
forecasts, producer intentions are good indicators.
Structural econometric
methods do less well than their proponents
might
have expected,
perhaps because in most of the
comparisons
their specifications
are not developed in any systematic way. A typical econometric modeller
performs
a limited amount
of
testing
of dynamic
structure
(often only the
Durbin-Watson
test, though matters are improving). There is also no widely agreed belief about
the best specification
to build from.
Although
the types of forecasts required
are
similar to those found in business,
agricultural
111
forecasters
have made little use of univariate
time series methods. On the other hand, for pure
forecasting
applications,
vector autoregression
is
replacing
simultaneous
equations
systems. The
limited evidence
of a number
of careful VAR
studies
supports
the generally
held view that
unrestricted
VAR models are not efficient. But
there are too few comparisons
of variable reduction and Bayesian approaches
to favor one over
the other.
There is an impression
that econometric
practices have improved
over the years though concrete evidence is hard to produce.
Dividing the
econometric
models in Table 7 somewhat
arbitrarily into the 12 studies (22 series) before 1985
and the 11 studies (23 series) since 1985, no
significant
improvement
is revealed in the success rate for short-term
forecasts of econometric
models against other methods. More studies are
needed on the relative success of causal models
for long-term
forecasts,
where they would be
expected
to do better.
Fildes (1985) reported
success rates for causal models in ex ante forecasts of 0.76 for medium and long-term
ex ante
forecasts (11 studies) and of 0.67 for short-term
forecasts (ten studies). However,
the difference
is not statistically
significant.
Fascination
with the subtleties
of different
econometric
methods
has produced
numerous
articles but has had little influence
on performance. While the sensitivity
of parameter
estimates to choice of specification
is now widely
acknowledged,
papers rarely quantify the fragility of their estimates.
Nor has much systematic
investigation
dynamic
specification
into
occurred.
Exceptions
are the relative handful of
studies that use VAR or that investigate
cointegration
among variables
where more detailed
testing is a necessity. The best that can be said is
that, since about the late 197Os, subjecting
systems of simultaneous
equations
to within-sample
validation
has become
common
practice.
It is
usually carried out deterministically
to assure the
stability of the estimated model over time, a test
which should be carried out stochastically
anyway. Exogenous
variables are taken as given, but
lagged
endogenous
variables
are usually
the
112
P.G. Allen
calculated
values. Aside from the need to examine dynamic properties,
there is no reason to
use calculated
values of lagged endogenous
variables that would be known
at the time the
forecast
is made (i.e. variables
whose lags are
longer
than the forecast
horizon).
If current
exogenous
variables were treated as unknown,
a
much better
assessment
of forecasting
ability
would result. Post-sample
forecasting
is better
than within-sample,
but using actual values of
exogenous
variables
that would be unknown
at
the time of forecast (or conditional
forecasting)
defeats the objective of finding the best forecasting model.
A current
unresolved
question
is that of
whether
to build more or less structure
into a
model.
Econometricians
generally
favor more
structure,
arguing for using all available data and
for conforming
with economic
theory.
Forecasters take the opposite view, to avoid adding
layers of variability
to the forecast calculation.
An argument
in favor of more structure
is that
although forecasts may have higher variance, this
may truly reflect the level of ignorance about the
future. A counter-argument
is that data and the
relationships
of different
reliabilities
are mechanically
aggregated,
creating
larger forecast
errors than would suitable
(and probably
judgmental)
weighting.
Reporting
of empirical
studies in economics
journals
is improving.
Many journals
now require as part of the guidelines
for manuscript
submission
that the data be available and clearly
documented
and that details of computations
sufficient to permit replication
be provided. (The
International
Journal
of Forecasting
was a
pioneer
in requiring
disclosure,
revising
its
guidelines
in Fall, 1988, over 1 year ahead of the
American Economic Review (September,
1989)
and the American Journal of Agricultural Economics (February,
1990)). Few go as far as the
Journal of Agricultural and Resource Economics
in demanding
documentation
of model specifications estimated but not reported in the submitted
manuscript.
Since there are no standard
procedures for testing forecasting
ability, details that
can affect the outcome of a comparison
must be
10 (1994) 81-135
given. Is the model re-estimated?

In what way?
How often? How many steps ahead? (Does one
take the omission of this detail to indicate one
step ahead?)
Are forecast
accuracy
statistics
based on aggregation
of all the h steps ahead
forecasts
or the one through
h steps
ahead
forecast?
More comparisons
are needed, if only with the
performance
of a naive model. RMSE in particular
provides
little information
on relative
performance.
Theils U, at least gives a comparison
against a naive no change model. One
suspects
that Theils statistic
is often not reported because of the poor light it would cast on
the models forecasting
performance.
Large scale
econometric
models seem particularly
remiss in
making comparisons.
A good comparison
would
be with a single reduced form equation
with, in
both cases, forecast rather than actual current
exogenous
variables.
Progress
depends
on researchers
following
a
proper
validation
procedure.
All
applied
economists
(and not just agricultural
forecasters)
should ask themselves
three questions.
How well
does the model perform
out-of-sample
(in a
holdout sample for cross section analysis, or in
the post-estimation
period in time series analysis)? How does the model perform
compared
with the one it is intended
to replace? And why
the difference?
Finally, we should admit that we
know less than we claim. Forecasters
should, as
a matter of course, make quantitative
probability
statements.
Doing so would shift the focus from
the point estimate, which will be wrong anyway,
to the information
content of the forecast.
9. Acknowledgments
I thank
David Bessler,
Mark Nerlove,
the
editor,
two anonymous
reviewers
and other
colleagues
for comments,
help and inspiration.
I
am particularly
grateful to Scott Armstrong
and
Bill Tomek. Without
their help, I would have
finished this paper a long time ago, but it would
not have been as good.
P.G. Allen
10. References
Only references
not found in the
below. Articles in the bibliography
text are denoted by R.
bibliography
are listed
referenced
in the main
Armstrong,
J.S., 1985, Long-range Forecasting: From Crystal
Ball to Computer, 2nd edn. (Wiley, New York).
Armstrong,
J.S. and F. Collopy,
1992, Error measures
for
generalizing
about forecasting
methods:
Empirical
comparisons,
International Journal of Forecasting, 8. 69-80.
Bliemel, F.W., 1973, Theils forecast accuracy coeffcient;
a
clarification,
Journal of Marketing Research, 10, 444-446.
Dalrymple,
D.J., 1987, Sales forecasting
practices,
International Journal of Forecasting, 3, 379-391.
Fildes, R.A., 1985, Quantitative
forecasting-the
state of the
art: Econometric
models. Journal of the Operational Research Society, 36, 549-580.
Just, R.E. and G.C. Rausser,
1993, The governance
structure of agricultural
science and agricultural
economics:
a
call to arms, American Journal of Agricultural Economics.
75 (October),
69-83.
McNown,
R., 1986, On the use of econometric
models: A
guide for policy makers. Policy Sciences, 19. 359-380.
11. Appendix
A: Publications
searched
Agricultural
and Resource
Economics
Review (formerly
Northeastern
Journal
of Agricultural
and Resource
Economics), 1984-1993
(Vols. 13-22).
American
Journal
of Agricultural
Economics
(formerly
Journal of Farm Economics),
1927-1993 (Vols. 9-75: 4).
Australian
Journal of Agricultural
Economics,
1970-1993
(Vols. 14-37: I).
Canadian
Journal
of Agricultural
Economics,
1952-1993
(Vols. 1-41: 1).
International
Journal of Forecasting,
1987-1993 (Vols. l9: 2).
and Applied Economics
(formerly
Southern
Journal
of Agricultural
Economics),
1969-1993
(Vols. l-25: 1).
and Resource Economics (formerly
Western
Journal
of Agricultural
Economics),
1977-1993
(Vols. 1-18: 1).
Economics,
1970-1993 (Vols. 1844: 2).
Journal
of Agricultural
Economics
Research
(formerly
Agricultural
Economics
Research),
1949-1993
(Vols. l-44:
2).
1982-1991 (Vols. l-10).
Quarterly
Review of Agricultural
Economics,
1948-1978
(Vols. 3-33)
(continues
with different
subject matter emphasis as Agriculture
and Resources
Quarterly).
Economics
(formerly
North Cen-
113
tral Journal
of Agricultural
Economics),
1979-1993
(Vols.
1-15: 2).
Review of Marketing
and Agricultural
Economics,
19701993 (Vols. 38-61: 1).
The Dialog database
files 10 and 110 (Agricola)
were
searched
over titles and descriptors
using the keyword roots
economic
and agricultur
and either forecast,
predict or
projection
for the years 1970-1992.
This produced
245
citations
of which six had already been identified
through
searching
the above journals.
Sixty-six citations were identified as possible additional
references,
although most were
cost of production
projections
or regional crop and livestock
supply-demand
projections
published
by various
USDA
branches.
Two articles out of the 245 were added to the
bibliography.
The Dialog database file 139 (Journal of Economic Literature) was searched
over descriptor
codes 7100, 7110, 7120,
7150 (agriculture:
general, supply and demand, situation and
outlook,
markets
and marketing)
and the keyword
root
forecast over titles and abstracts
for the years 1969-1992.
This produced
70 citations
of which 27 had already been
identified through searching the above journals. A further 21
citations were identified as possible references and eight were
added to the bibliography.
12. Appendix
B: Bibliography
Bibliography key: CO, comparison

of forecasting
methods;
EV, evaluative or critical assessments;
MK, market efficiency;
LA, large scale (set 6); OU, outlook (set 3); PG. programming model; PR, probability,
also includes value of information and Bayesian decision making (set 8); R, article is
referenced
in main paper; SN, single equation
econometric
(set 4); ST, single sector model (set 5); TS, time series (set
7).
Agriculture
Canada, 1978, Commodity
Forecasting
Models
for Canadian
Agriculture,
2 Vols., coordinated
by Z.A.
Hassan and H.B. Huff (Ottawa,
Canada),
publication
nos.
7812 and 7813, October
and December
1978. R SN ST
Describes
ten of the 13 structural
commodity
models under
development
by or on behalf of Agriculture
Canada. Includes
hog supply. hog marketing,
pork. feed grains, eggs, dairy,
beef, broiler, wheat and farm inputs. The primary goal of
the research program
is to improve the forecasts of basic
market relationships
to complement
the work of commodity
specialists.
(H.B. Huff. Introduction
and Overview,
p. 1).
Several of the models are projections
rather than forecasting
models
and model
simulation
is illustrated
rather
than
forecasting.
Ahlund,
M.L., H.C. Barksdale
and J.B. Hilliard,
1977,
Multivariate
spectral analysis: an illustration,
Decision Science, 8, 7344752.
R TS Illustrates
method
with monthly
farm, wholesale,
retail beef prices from 1949.1 to 1972.12.
No forecasting.
114
Allen, P.G.. 1984, A note on forecasting

with econometric
models
Northeastern
and Resource
Economics,
13. 264-267.
TS Compares
within-sample
cranberry yield forecasts
from univariate
ARIMA
and from
econometric
models with various combinations
of actual and
forecast monthly average temperatures.
ARIMA worst MSE,
but econometric
with forecast temperatures
worse than trend
regression.
Antonovitz,
F. and R. Green. 1990, Alternative
estimates
of fed beef supply response
to risk, American
Journal
of
Agricultural
Economics.
72. 475-487.
SN CO PR Compares
forecasts
of econometric,
naive, adaptive
and rational
expectations.
Aradhyula,
S.V. and M.T. Holt, 1088, GARCH
time-series
models:
an application
to retail livestock
prices. Western
Journal
of Agricultural
Economics,
13, 365-374.
R TS CO
For beef, pork and chicken
prices a within-sample
test
showed
that a GARCH
model fitted better than an AR
model with time trend.
Arzac.
E. and M. Wilkinson,
1979. A quarterly
econometric model of the United States livestock and feed grain
markets
and some of its policy implications.
American
Economics,
61, 22-31. LA CO A 42
equation
model including
beef, pigs and corn sectors with
quarterly,
semi-annual
and annual equations.
Ashby. A.W.. 1964, On forecasting
commodity
prices by
the balance sheet approach,
Journal of Farm Economics,
46.
6333643. R ST Applied to the world sugar market.
Askari, H. and J.T. Cummings,
1977, Estimating
agricultural supply response
with the Nerlove
models: a survey,
International
Economic Review. 18, 257-292. R SN A review
(190 references)
containing
about 550 short-run
and 550
long-run price elasticity estimates categorized
by commodity,
location and data range.
Australian
Bureau
of Agricultural
and Resource
Economics.
Outlook
1Y92, Annual.
Also
references
other
ABARE
publications.
OU.
Babula.
R.A..
1988, Contemporaneous
correlation
and
modeling Canadas imports of U.S. crops, Journal of Agricultural Economics
Research,
41, 33-38.
ST CO Compares
ordinary
least squares,
seemingly
unrelated
regression
and
naive post-sample
forecasts
of annual imports.
Based on
1983-1985,
OLS predicts cotton and rice imports with least
MAPE, followed by SUR, while for soybeans,
naive is best
and OLS worst.
Baker,
G.L. and W.D. Rasmussen,
1975, Economic
research in the Department
of Agriculture:
a historical perspective, Agricultural
Economic
Research,
27, 53-72.
OU A
politically
oriented
historical
review with very little on
forecasting
or outlook.
Baker. J.D. and D. Paarlberg,
1952. Outlook evaluationmethods
and results,
Agricultural
Economic
Research,
4,
105-l 14. R OU EV Production,
carryover and price forecasts
for wheat.
Turning
point accuracy
and error
reduction
accuracy
scores.
Barichello,
R.R..
1990, Medium
term outlook
for tree
fruit. Canadian
Economics,
38, 591l
602. OU Recent history.
10 (1994) 81-13
Barr. T.N. and H.F. Gale, 1973, A quarterly

forecasting
model for the consumer
price index for food, Agricultural
Economic
Research,
25, l-14.
ST A six equation
semirecursive model,
Becker,
J.A. and C.L. Harlan,
1939, Developments
in
crop and livestock
reporting
since 1920. Journal
of Farm
Economics,
21, 799-827. R OU Early history of outlook work
in the US.
Beenstock,
M. and R.J. Bhansali,
1980, Analysis of cocoa
price series by autoregressive
model fitting techniques,
Economics.
31, 237-242.
TS CO AR(p)
model fitted to monthly data. P = 2 was best fit according to
several
final prediction
error
criteria.
AR model
more
accurate than naive no change in one step ahead post-sample
forecasting.
Bell, T.M. et al., 1978, OASIS-an
overview. Agricultural
Economic
Research,
30, 1-7. R OU Describes the process of
generating
and disseminating
forecasts in USDA-Economics,
Statistics and Cooperative
Service (ESCS) using the outlook
and situation
information
system (OASIS).
Berck,
P. and J.A.
Chalfant,
1990, Forecasts
from a
nonparametric
approach:
ACE, American
Journal
of Agricultural
Economics,
72, 7999803. R TS See McIntosh
and
Dorfman
(1990) competition.
Uses alternating
conditional
expectations.
Bessler,
D.A.,
1984a. An analysis of dynamic economic
relationships:
an application
to the U.S. hog market, Canadian Journal of Agricultural
Economics,
32, 109-124. R TS
Good explanatory
article on VAR.
Bessler. D.A., lY84b, Subjective probability,
in P.J. Barry
(editor),
Risk Management
in Agriculture
(Iowa State University
Press, Ames,
IA), Chapter
4, pp. 43-52.
R PR
Review and possible applications
in agricultural
economics,
including forecasting.
Bessler. D.A.. 1990, Forecasting
multiple series with little
prior information,
American
Economics, 72, 788-792.
TS CO See McIntosh
and Dorfman
(1990) competition.
Uses VAR.
Bessler, D.A. and R.A. Babula,
19X7, Forecasting
wheat
exports: do exchange rates matter?, Journal of Business and
Economic
Statistics, 5, 397-406. TS CO Compares
restricted
and unrestricted
four-variable
VAR and univariatc
autoregressive
mod&.
No consistent
ordering
for forecasting
ability. MSE decomposition
shows that wheat price export
shipments
are slightly related to past exchange rates.
Bessler. D.A. and J.A. Brandt, 1979, Composite
Forecasting of Livestock
Prices: An Analysis of Combining
Alternative Forecasting
Methods Purdue University.
Agricultural
Experiment
Station Bulletin 265, West Lafayette,
IN. TS CO
The study is condensed
and reported
in Bessler and Brandt
(1981).
Bessler, D.A. and J.A. Brandt, 1981, Forecasting
livestock
prices
with individual
and composite
methods,
Applied
Economics,
13. 513-522.
R SN TS CO A condensation
of
Bessler and Brandt (1079). Compares
three individual
and
four composite
methods for hog, cattle and broiler prices.
Bessler,
D.A. and J.A. Brandt,
1992. An analysis of
forecasts
of livestock prices, Journal of Economic
Behavior
and Organization,
18, 249-263.
TS CO Compares
futures
price and expert as forecasts of one quarter ahead cash prices
of steer cattle and hogs. Fits three variable VAR model using
Hsiaos
method
to find best specification
(according
to
Akaike
final prediction
error criterion).
Futures price contains all information
for forecasting
hog price, but not for
cattle price where expert forecast
contains
additional
information.
Bessler, D.A. and P.J. Chamberlain,
1987, On Bayesian
composite
forecasting,
Omega,
15, 43-48.
TS CO Forms
Bayesian composites
with beta prior distributions
at various
tightness
parameters.
Compares
composite
hog price forecasts formed from two series of university
expert forecasts,
from expert and random walk, and from expert and constant.
Bessler,
D.A. and T. Covey, 1991, Cointegration:
some
results on U.S. cattle prices, Journal of Futures Markets,
11,
461-474.
TS CO Compares
accuracy
of VAR form of
cointegrating
model, (Hsiao) restricted
VAR and univariate
models in forecasting
daily cash prices of slaughter
steers.
Restricted
VAR has lowest RMSE in post-sample
forecasting
at all horizons up to ten days.
Bessler,
D.A. and J.C. Hopkins,
1986, Forecasting
an
agricultural
system with random
walk priors, Agricultural
Systems,
21, 59-67.
R TS CO A five variable
system,
estimated
by VAR, comparison
of three types of priors and
ARIMA.
US shrimp market.
Bessler.
D.A. and J.L. Kling, 1986, Forecasting
vector
autoregressions
with Bayesian priors, American
Journal of
Agricultural
Economics,
68, 144-151.
R TS CO Quarterly
sow farrowings,
corn and hog price, hog slaughter.
Comparison of four methods.
Bessler,
D.A. and J.L. Kling, 1989, The forecast
and
policy analysis, American Journal of Agricultural
Economics,
71, 503-506.
R TS Assessment
of predictive
performance:
reliability
(calibration)
and ability to sort. Policy analysis
usually included forcing variables (exogenous
variables set by
policy). Example with VAR model.
Bessler, D.A. and J.L. Kling, 1990, Prequential
analysis of
cattle prices, Applied Statistician,
39, 95-106. R TS CO PR
Compares
univariate
and two-variable
VAR models of daily
cash and futures prices of live cattle. VAR has significantly
smaller RMSE for out-of-sample
one day ahead cash price
forecasts.
Generates
by simulation
daily forecast
distributions. VAR has tighter distribution
and is well calibrated.
Univariate
cash price forecasts are not. Distributions
cannot
be recalibrated
to later time periods.
Bessler, D.A. and C.V. Moore,
1979, Use of probability
assessments
and scoring
rules for agricultural
forecasts,
Agricultural
Economic
Research,
31, 44-47.
PR Demonstrates the use of the logarithmic
scoring rule (a proper rule
that gives the expert assessor the highest payoff for setting
stated beliefs equal to true beliefs). Based on the work of
R.L. Winkler and A.H. Murphy,
1968, Good probability
assessors,
Journal of Applied Meterology,
7, 751-758.
Bieri, J. and A. Schmitz, 1970, Time series modeling of
economic
phenomena,
American
Journal
of Agricultural
Economics,
52, 805-813.
TS Illustrates
the Box-Jenkins
(B-J) approach.
No forecasting.
115
Blake. M.J. and T. Clevenger,

1984, A linked annual and
monthly
model for forecasting
alfalfa hay prices, Western
Journal
of Agricultural
Economics,
9, 195-199.
ST A four
equation
sector model, two stages. New Mexico.
Blond, D.L.. 1976, External effects and U.S. wheat prices,
Business Economics,
11-4 70-81. ST Monthly three equation
econometric
model of US and Australian
prices and US
exports validated-within-sample
and used for both forecasts
and simulations
of different policies.
Bottum, J.C., 1966, Changing functions of outlook in the
U.S., Journal of Farm Economics,
48, 1154-1159.
R OU EV
Need improved
accuracy.
probabilistic
predictions,
more
timely and effective dissemination.
Also referenced
in Rausser (1982) p. 829.
Bourke,
J.J..
1979, Comparing
the Box-Jenkins
and
econometric
techniques for forecasting
beef prices, Review of
Marketing
and Agricultural
Economics,
47. 95-106. SN TS
CO Quarterly,
monthly US cow beef wholesale
price. B-J
the more accurate,
but see Revel1 (1981).
Boutwell, W., C. Edwards,
R. Haidacher,
H. Hogg, W.E.
Kost, J.B. Penn, J.M. Roop and L. Quance,
1976, Comprehensive
forecasting
and projection
models in the economic research service, Agricultural
Economic
Research,
28,
41-51.
R OU Describes
near-term
outlook
and long-range
projection
models in use by USDA-ERS
in 1976.
Brandt,
J.A., 1985, Forecasting
and hedging: an illustration of risk reduction
in the hog industry,
American Journal
of Agricultural
Economics,
67, 24-31. R SN TS CO Compares same methods as Brandt and Bessler (1981). Focus is
on use of forecast by producer
or buyer to make hedging
decision. Selective hedging based on a price forecast is some
advantage
over routine hedging or no hedging. Little difference in the means and standard
deviations
of the prices
resulting from each strategy.
Brandt, J.A. and D.A. Bessler, 1981, Composite
forecasting: an application
with U.S. hog prices, American Journal of
Agricultural
Economics,
63, 135-140. R SN TS CO compares
single equation,
ARIMA,
expert opinion and four composite
methods.
Brandt, J.A. and D.A. Bessler, 1982, Forecasting
with a
dynamic
regression
model:
a heuristic
approach , North
Central Journal of Agricultural
Economics,
4, 27-37. TS CO
Compares
US hog prices forecast by ARIMA
and bivariate
regression.
Brandt, J.A. and D.A. Bessler, 1983, Price forecasting
and
evaluation:
an application
in agriculture,
Journal of Forecasting, 2. 237-268.
SN TS CO Compares
seven approaches:
time series, econometric.
judgment.
US hog prices.
Brandt,
J.A. and D.A. Bessler,
1984, Forecasting
with
vector autoregressions
versus a univariate
ARIMA
process:
an empirical
example with U.S. hog prices , North Central
Journal
of Agricultural
Economics,
6, 29-36.
R TS CO
Quarterly
hog prices forecast better by ARIMA model than
by four equation
VAR (using Tiaos method
of variable
reduction)
with first-differenced
data.
Brandt,
J.A., R.E. Young, II and A.W. Womack,
1991,
Modeling
the impact of two agricultural
policies on the US
livestock sector: a systems approach,
Agricultural
Systems,
116
P.G. Allen
I International Journal of Forecasring
35, 129-155. R LA Describes

the beef, pork and poultry
components
of the FAPRI model. a first generation
annual
model of about 250 equations
that covers six livestock and
eight held crop sectors. Within-sample
validation
includes
historical simulation.
Policy simulations
for 1986-1995 based
on tabulated
macroeconomic
variable values.
Breimeyer,
H.F., 1952, Forecasting
annual cattle slaughter. Journal
of Farm Economics,
34. 392-398.
SN Annual
single equation
model based on inventory
values known by
mid-February
of the forecast year. No forecasts.
Buckwell,
A.E. and D.M. Shicksmith,
1979. Projecting
farm structural
change, Journal of Agricultural
Economics.
30, 131-143.
PR LP used to compute
Markovian
transition
probability
matrix for six farm sizes (measured
by standard
man days) plus entry/exit
class in each of eight UK regions.
Annual data and projections
for 1975-1980-1985-2000.
Bullock,
J.B. and S.H. Logan,
1970, An application
of
statistical decision theory to cattle feedlot marketing,
American Journal
of Agricultural
Economics.
52. 234-241.
R PR
Single equations
for monthly
beef price and for number
marketed
used to forecast
prices and to examine
various
feed/sell
strategies.
Value of forecasts
about 1% of gross
value of cattle sold.
Bullock, J.B., D. Ray and 9. Thabet,
1982, Valuation of
crop and livestock reports: methodological
issues and questions. Southern Journal of Agricultural
Economics,
4. 13-19.
R OU EV Dispels
some farmer
beliefs about
livestock
reports:
need for accuracy,
price influence
and resource
allocation
impacts. Suggests intentions reports more valuable
than late season crop size estimates.
Byers, J.D. and D.A. Peel, 1987, Forecasting
livestock
slaughter:
an empirical assessment
of MLC [Meat Livestock
Commission]
forecasts,
Journal
of Agricultural
Economics,
3X, 235-241. OU CO Forecasts zero to four quarters ahead of
cattle and sheep slaughter
in Britain tested for unbiasedness
and efficiency
in revision
and use of public information.
Current period MLC forecast more accurate than autoregression or no change model.
Callander,
W.F. and J.A. Becker, 1923, The use of pars
and normal in forecasting
crop production,
Journal of Farm
Economics.
5, 185-197.
OU Explains the meaning of condition in crop yield forecasting.
Illustrates
the calculation
of
par yield.
Capel, R.E., 1968. Predicting wheat acreage in the prairie
provinces,
Canadian
Economics,
16,
87-89.
R SN Uses Cagans
adaptive
expectations
model,
single equation.
Cargill. T.F. and G.C. Rausser,
1972, Time and frequency
domain
representations
of futures
prices as a stochastic
process, Journal of the American
Statistical Association,
67,
23-30. R TS Spectral analysis. No forecasting.
Carlson.
G.A.,
1970, A decision-theoretic
approach
to
crop disease prediction
and control,
American
Journal
of
Agricultural
Economics.
52, 216-225.
PR A single loss
prediction
equation and Bayesian measures used to arrive at
optimum
pesticide
levels in controlling
brown rot in cling
peaches in California.
10 (1994) XI-135
Carter.
C.A.
and C.A.
Galopin,
1993, Informational
content
of government
hogs and pigs reports,
American
Journal
of Agricultural
Economics,
75, 711-718.
MK A
hypothetical
futures trader was assumed to receive the hogs
and pigs report one day in advance and buy or sell a futures
contract
if the report contained
unanticipated
information.
However.
the information
content of the report is low. Only
a risk-neutral
trader with low trading expenses
would be
willing to pay for such advance information.
Cavin. J.P., 1952, Forecasting
the demand for agricultural
products.
Agricultural
Economics Research,
4, 65-76. SN An
appraisal of the forecasting
method used by the USDA: level
of economic
activity.
aggregate
agricultural
income
and
prices, individual farm commodities
(pork as example). Also
tabulates
actual annual changes and forecast changes for 5
years.
Chan, M.W.L., 1981. An econometric
model of the Canadian agricultural
economy,
Canadian
Economics,
29, 265-282.
R LA Large scale econometric.
annual macroeconomic-type
model.
Chavas,
J.-P. and M.T. Holt, 1991, On non-linear
dynamics:
the case of the pork cycle, American
Journal
of
Agricultural
Economics,
73, 819-828. TS Compares
AR and
GARCH
models
to show that the pork cycle is better
captured
by a non-linear
dynamic process than by a linear
one. No tests of predictive
ability.
Chen, D.T., 1977, The Wharton
agricultural
model: structure. specification
and some simulation
results,
American
Journal
of Agricultural
Economics,
59, 107-116.
R LA
Second generation
model (recursive or feedback
approach).
Chen, D.T. and D.A. Bessler. 1990, Forecasting
monthly
cotton price, International
Journal
of Forecasting,
6, 103113. R TS CO Compares
67 equation
sectoral
and five
equation
VAR models
both in a time of policy shock
(1986.8-1986.12)
and in an ordinary time (1984.8-1984.12),
with and without parameter
updating.
Updating
brings little
benefits. VAR does well in ordinary time period but badly in
policy shock interval.
A combined
model with structural
exogenous
variables predicted
by VAR rather than naive no
change was worse than the structural
model alone.
Chin, S. and M. Spearin.
1978. An analysis of quarterly
provincial
and regional hog supply functions,
in Agriculture
Canada,
Commodity
Forecasting
Models for Canadian
Agriculture vol. 1. coordinated
by Z.A. Hassan and H.B. Huff.
Ottawa.
Canada,
publication
no. 7812, pp. 5-14. SN Set of
nine Nerlove-type
partial adjustment
single equations.
Cigno, A.. 1971, Production
and investment
response to
changing market conditions,
technical know-how and government policies, Review of Economic
Studies, 38, 63-94. LA
LP formulation
with dynamics included through capital stock
adjustment,
adaptation
to risk and technical change applied
to forecast five crop and one (?) livestock outputs and prices
for N.E. Italy. Projections
for 1965-1970
compared
with
actual, usually over 1965-1968 by means of graph only.
Cluff, M., 1990, Agriculture
Canadas
medium term outlook: 1990-95, Canadian
Economics.
38, 615-629.
R OU Describes process, summarizes
forecasts

(based on Food and Agricultural
Regional Model-large
scale
econometric,
including macroeconomic
and trade links). See
Barichello,
Downey, Jones, Owen, Womack for other articles
in same issue.
Coiling, P.L. and S.H. Irwin. 1990, The reaction of live
hog futures prices to USDA Hogs and Pigs Reports, American Journal of Agricultural
Economics,
72, 84-94. R OU CO
MK Compares
survey of market analysts with USDA report.
Supports efficient market hypothesis.
Collins,
G.S. and C.R. Taylor,
1983, TECHSIM:
a regional field crop and national livestock econometric
simulation model, Agricultural
Economics
Research,
35-2, 1-18. R
LA Precursor
of AGSIM.
13 region model of eight crop and
four livestock
products
estimated
in regional
blocks by
generalized
least squares.
No validation
or forecasting
described.
Colman, D. and D. Leech, 1970, A forecast of milk supply
in England
and Wales, Journal of Agricultural
Economics,
21, 253-265. PR Markov transition
probability
matrices with
six size classes (based on milk output) plus entry/exit
class
(assumed three times the population)
computed
from annual
permanent
producer
sample of dairy farms for each of 11
regions. Forecast distribution
of producers
in 1970-1971 and
1975-1976.
Colman, D. et al., 1975, Forecasting
and Projection
in the
Agricultural
Sector Department
of Agricultural
Economics,
University
of Manchester,
Bulletin No. 151. EV Review of
agricultural
forecasting.
Colman,
D.R.,
1967, The application
of Markov
chain
analysis to structural
change in the northwest dairy industry,
Economics,
18, 351-361. R PR 19581965 sample of 236 farms (not for all years) classed into five
sizes (number
of cows) plus entry/exit
group. Actual 1960
population
used to predict 1965 distribution,
which had error
range of 3.4-2&l%
compared
with actual.
Conway,
R., N. Childs, K. Ingram and C. Arnade,
1990,
Forecasting
wheat, corn and soybean U.S. exports with fixed
and stochastic
coefficients
estimators,
poster session at the
American
Agricultural
Economics
Association
meetings,
Vancouver,
Canada.
(Abstract
in American
Economics,
72 (December
1990): 1384.) SN Fixed
coefficient models generally superior to time-varying
parameter models.
Conway,
R.K.,
J.
Hrubovcak
and
M.
LeBlanc,
1987a. A forecast evaluation
of capital investment
in agriculture USDA-ERS
Technical Bulletin Number 1732, 25 pp. SN
CO Earlier version of Conway et al. (1990).
Conway,
R.K.,
C.B. Hallahan,
R.P. Stillman and P.T.
Prentice,
1987b, Forecasting
Livestock
Prices: Fixed and
Stochastic
Coefficients
Estimation
USDA-ERS
Technical
Bulletin Number 1725, 28 pp. SN CO Compares
post-sample
quarterly
forecasts
of beef, pork and chicken retail prices
from four econometric
and one generalized
ARIMA models
using actual values of explanatory
variables. Varying parameter regression
best in two of the three series.
Conway,
R.K., J. Hrubovcak
and M. LeBlanc,
1990, A
forecast
evaluation
of capital
investment
in agriculture,
117
International
6, 509-519.
R SN CO
Compares
stochastically
varying
parameter
regression
(Swamy-Tinsley,
Hildreth-Houck,
Kalman filter, CooleyPrescott),
AR(l),
AR(2),
fixed coefficient
(Lucas flexible
accelerator
and same function
as Swamy-Tinsley
with and
without
added
independent
variables)
and random
walk
(total of 13).
Cornelius,
J.C., J.E. Lkerd and A.G. Nelson,
1981, A
preliminary
evaluation
of price forecasting
performance
by
agricultural
economists,
American
Journal
of Agricultural
Economics,
63, 712-714. CO Survey of agricultural
economist forecasts for five agricultural
products.
Cox, C.B. and P.J. Luby, 1956, Predicting
hog prices,
38, 931-939. R SN True single
equation forecasting
models 6-12 months ahead. Annual and
semi-annual
models. Required
two exogenous
forecasts (income). Evaluated
within-sample,
using standard
error and
turning points.
Criddle. K.R. and A.M. Havenner,
1990, Forecasts from a
state-space
multivariate
time series model, American Journal
of Agricultural
Economics,
72, 788-792.
TS CO See McIntosh and Dorfman
(1990) competition.
Crom, R.J., 1970, A Dynamic Price-Output
Model of the
Beef and Pork Sectors USDA-ERS
Technical Bulletin Number 1426. R ST Lists 128 operating
rules for improving
predictions
from the CromiMaki
model.
Crom, R.J., 1972, Economic projections
using a behavioral
model, Agricultural
Economics
Research,
24, 9-15. LA The
model of Crom/Maki
modified by 126 operating
rules.
Crom, R.J., 1975, Development
of a systems approach for
livestock research in ERS, American
Economics.
57, 509-512.
R LA ST Traces development
of
systems approach
in USDA-ERS
meat division.
Crom, R.J. and W.R. Maki, 1965a, A dynamic model of a
simulated
livestock-meat
economy,
Agricultural
Economics
Research,
17, 73-83. R LA A 30 equation semi-annual
model
of the beef-pork
sectors.
Crom,
R.J. and W.R. Maki, 1965b, Adjusting
dynamic
models to improve their predictive
ability, Journal of Farm
Economics,
47, 963-972.
R LA Development
of operating
rules through simulation.
Cromarty,
W.A., 1959, An econometric
model of United
States agriculture,
Journal
of the American
Statistical
Association.
54, 556-574. R LA Annual 12 product agricultural
sector model linked to Klein-Goldberger
macromodel
with
no feedbacks
(first generation
model).
Cromarty,
W.A., 1961, Free market projections
based on a
formal econometric
model, Journal of Farm Economics,
43,
365-378.
R LA EV Forecasts
from wheat and feed grains/
livestock sector models. An assessment
(p. 365) We are in
the infancy stage of estimating
the economic
interrelationships among agricultural
commodities.
Cromarty,
W.A. and W.M. Myers, 1975. Needed improvements in application
of models for agriculture
commodity
price forecasting,
American
Journal
of Agricultural
Economics, 57, 172-77. R LA EV Simple and non-simultaneous
models forecast better.
118
P.G.
Allen
I International
Journal
Crowder,
R.T.,
1972. Statistical
vs judgement
and audience considerations
in the formulation
and use of cconometric models, American Journal of Agricultural
Economics.
54, 779-783. LA ST EV Describes the forecasting
situation in
the commodity
industry.
Dalton. M.E.. 1974, Short term wool price movementssa
projection
model. Quarterly
Economics, 27, 195-219. SN Econometric
model that is revised in
Dalton and Taylor (1975).
Dalton,
M.E. and L.F. Lee. 1975. Projecting
sheep numbers shorn-an
economic
model, Quarterly
Economics,
28. 225-239.
SN Annual single equation econometric
model that measures
only within-sample
forecast accuracy.
Dalton, M.E. and E. Taylor.
1975, Further developments
in a model projecting
short-term
wool price movements.
Quarterly
Economics.
28, 209-222.
SN Quarterly
single equation econometric
model that makes
price projections,
compares
them with actual prices after
market
intervention
by government
agency and forecasts
intervention
purchase quantities.
Daly. R.F.. 1966. Current questions on national agricultural outlook,
Journal
of Farm Economics,
48, 116881174.
R
OU EV Discusses timing of reports and outlook conference,
analytical
and data bases for outlook,
need for improved
accuracy.
Davison.
C.W., C.A. Arnade
and C.B. Hallahan.
1989.
Box-Cox
estimation
of U.S. soybean
exports.
Journal
of
Agricultural
Economics
Research,
41, 8-16. SN CO Postsample forecasts
(3 years) of soybean imports from the US into
nine markets using linear, log-linear and Box-Cox
functions
and actual exogenous
variable values. Naive forecasts generally had smallest MAPE. followed by the linear model.
Dean. G.W., S.S. Johnson and H.O. Carter. 1963, Supply
functions
for cotton in Imperial Valley, California.
Agricultural Economics
Research.
15, I-14. R PR Uses 1950-19551960 census data to obtain Markovian
transition
probability
matrix
for five farm sizes (acres) plus entry/exit
group
(assumed
at 100 000) to predict size distribution
for 19551960-1965-1970-1975.
No post-sample
comparisons.
DeCanio,
S.J.. 1980, Economic
losses from forecasting
error in agriculture.
Journal of Political Economy,
88, 2344
258. R PR Assumes that farmers are profit maximizers
and
their observed
production
is based on an incorrectly
predicted product price ratio. Using an assumed product-transformation
curve the difference
between gross revenue based
on the incorrectly
predicted
prices and that which would
result from using perfectly forecast prices is the value of a
perfect price forecast.
Dietrich, J.K. and A.D. Gutierrez.
1973, An evaluation
of
short-term
forecasts
of coffee and cocoa, American
Journal
of Agricultural
Economics,
55, 93-99.
OU CO Compares
different government
agency forecasts by decomposing
MSE.
Most forecasts show small downward
bias.
Dixon. B.L. and L.J. Martin. 1982, Forecasting
U.S. pork
production
using a random
coefficient
model.
American
Journal
of Agricultural
Economics.
64. 530-538.
SN CO
Compares
fixed and varying coefficent models. Quarterly.
of Forecasting
10 (1994) XI- 135
Dixon. P.B., B.R. Parnenter,

J. Sutton and D.P. Vincent,
1982, ORANI:
A Multi-sectoral
Model of the Australian
Economy
(North-Holland.
Amsterdam).
R LA Description
of a Johansen-type
computable
general equilibrium
model
with a detailed agriculture
sector.
Dorfman,
J.H. and A. Havenner,
1991, State-space
modeling of cyclical supply,
seasonal
demand
and agricultural
inventories.
American
Journal
of Agricultural
Economics.
73. 829-X40.
SN Estimates
annual
supply
and monthly
demand of five sizes of canned olives in California. Validated
by Henriksson-Merton
confidence
interval
test. Used to
calculate
optimal carryover
inventories.
Dorfman,
J.H. and C.S. McIntosh,
1990, Results of a price
forecasting
competition.
American
Journal
of Agricultural
Economics,
72, 804-808. TS CO Neither true model nor any
of three methods
dominated.
See McIntosh
and Dorfman
(1990) for references
to methods.
See Tegene (1091).
Douvelis,
G..
1992, Soybean
production
estimates:
a
journey
through
the last 27 years. Oil Crops Situation
and
Outlook Report USDA-ERS
OCS-35, pp. 13-20. OU Calculates average forecast (as percentage
of final value) and 95%
confidence
interval for planted acres. harvested
acres, yield
and production
of soybeans for different months of the year
from 1965-1991.
Tabulated
forecast and final estimate values
permit calculation
of standard forecast accuracy statistics. No
comparisons
with other forecast methods.
Downey.
R., 1990, Grains and oilseeds outlook, Canadian
Journal
of Agricultural
Economics,
38, 575-576.
OU Description of 199(&1991
prospects.
Dubman,
R., R. McElroy and C. Dodson, 1993, Forecasting Farm Income: Documenting
USDAs Economic
Model
USDA-ERS
Technical
Bulletin Number
1825, 48 pp. R LA
The accounting-type
model of approximately
1000 equations
(listed in the appendix)
forecasts cash receipts for 21 crops
and 11 livestock commodities,
CCC loans for nine crops and
values of inventory
change for 17 crops and four livestock
commodities.
It is updated monthly and published quarterly
using expected
prices and production
provided
by USDA
analysts.
Eales. J.S., B. K. Engel, R. J. Hauser and S.R. Thompson,
1990, Grain price expectations
of Illinois farmers and grain
merchandisers,
American Journal of Agricultural
Economics,
72. 701~-708. PR In most instances
the futures
price (of
soybeans
and corn) is an appropriate
proxy for expected
price. However.
volatilities implied by option premia usually
overestimate
the subjective
variances
of farmers and merchants,
a finding
of overconfidence
consistent
with the
psychology
literature.
Ebling, W.H.. 1939, Why the government
entered the field
of crop reporting
and forecasting.
Journal
of Farm Economics, 21, 718-734.
R OU Early history.
Edwards,
C.. M.G. Smith and R.N. Patterson.
1985, The
changing
distribution
of farms by size: a Markov analysis,
Agricultural
Economics
Research.
37, l-16.
R PR Used
lY7441978 longitudinal
records of farms, eight size groups
plus entry/exit
group. Projected
1974-197881982
and compared with actual. Also projected
1990-2000.
Egbert. A.C.. 196). An aggregative
model of agriculture:
P.G. Allen I International Journal of Forecasting 10 (1994) Rl-135

empirical
estimates
and some policy implications,
American
Economics,
51, 71-86. R LA Annual
four equation
model treating agriculture
as a separate sector
with no feedbacks
(first generation
model). Validated withinsample and used for long-term
projections.
Egbert. A.C. and S. Reutlinger,
1965, A dynamic long-run
model of the livestock-feed
sector, Journal of Farm Economics, 47, 1288-1305. R LA Annual 57 equatton
recursive
model covering seven livestock products.
Eidman,
V.R.. G.W. Dean and H.O. Carter.
1967, An
application
of statistical decision theory to commercial
turkey
production,
49, 852-868. R PR
Bayesian decision theory used to aid turkey farmer deciding
among:
independent
production,
guaranteed
payment
per
turkey (contract
A) and payment
per pound (contract
B).
Value of price predictor
(from single econometric
equation)
$600 per year on expected
return of approximately
$4500.
Value of perfect price forecast $2700 per year.
Elam. EW. and S.H. Holder,
1985, An evaluation
of the
rice outlook and situation price forecasts,
Southern Journal
of Agricultural
Economics,
17. 155-162. R OU CO Compares
agency forecasts with ARIMA
model. No significant difference found.
Elizak, H. and W.N. Blisard, 1989, Quarterly
forecasting
of meat retail prices:
a vector
autoregression
approach
USDA-ERS
Staff Report
AGES
89-27. 14 pp. TS CO
Compares
two VAR approaches
with ERS forecasts of CPls
for 5 meat groups. Hsiao restricted VAR has generally lower
RMSE
than Kaylens
method
(Kaylen,
1988) with ERS
forecasts worst.
Epperson,
J.E. and S.M. Fletcher, 1985, Tandem forecasting of price and probability-the
case of watermelon,
Canadian Journal
of Agricultural
Economics.
33, 375-385.
SN
Specifies
two equation
OLS and probit
model.
Forecast
criteria include probability
prediction
accuracy interval.
Ezekiel, M., 1927, Two methods of forecasting
hog prices,
Journal of the American
Statistical Association.
22, 22-30. R
SN Based on graphs of forecasts 1-6 months ahead, empirical regression
(using lagged explanatory
variables known at
the time of the forecast) was more accurate than a synthetic
method of setting expected
supply (estimated
from leading
indicators
such as pig crop survey) against a supply function.
Forecasts
prepared
12 months later suggest opposite conclusion (based
on footnoted
actual values).
Notes (p. 29)
$6
eventually
the most satisfactory
results may be obtained
by some combination
of the
methods.
Ezekiel,
M., 1954, Agricultural
situation
and outlook
work, national and international.
FAO Monthly Bulletin of
Agricultural
Economics
and Statistics, 3, 18-28. OU Reviews
history and accuracy
of outlook work in US and Canada.
Table 1 reports directional
accuracy
of 219 FAO outlook
forecasts
for 13 commodity
groups, made between 1949 and
1952. Overall 76% are in the correct direction.
Fackler,
P.L. and R.P. King. 1990, Calibration
of optionbased
probability
assessments
in agricultural
commodity
markets,
American
Economics.
72,
73-83. R PR Option price premia used to calculate probability distribution
around the closing price of the futures contract
119
of the same commodity

4 and 8 weeks ahead. Calibration
tests performed
on corn, cattle, soybeans and hogs contracts.
Fanchon.
P. and J. Wendell, 1992, Estimating VAR models
under
non-stationarity
and cointegration:
alternative
approaches to forecasting
cattle prices. Applied Economics,
24.
207-217.
R TS CO Compares
restricted
VAR and VEC,
unrestricted
and Bayesian VAR and univariate
models of
three cattle prices (for different
animal weights) and corn
price. Over 1 to 58 months ahead, restricted
VAR has least
MSE, then VEC,
with VEC better
only at the longer
horizons.
Feather,
P.M. and M.S. Kaylen, 1989, Conditional
qualitative forecasting,
American
Journal
of Agricultural
Economics, 71, 195-201.
SN TS CO For qualitative
forecasting
(e.g. change of direction
of price) constructs
a composite
based on Bayesian
updating
of probabilities.
For quarterly
hog price forecasts at various horizons up to 44 steps ahead.
expert
and ARIMA
methods
made more correct turning
point forecasts than composite.
econometric
worst.
Findlay, J.R.. 1968. Farm practice adoption:
a predictive
model, Rural Sociology, 33. 518. PR A segmentation
(classification or configural)
method.
Uses four observable
binary
farm or farmer characteristics
(e.g. farm size more than or
less than 400 labor hours) to discriminate
between early and
late adopters
on a calibration
sample of farmers. Tested on
three hold-out samples with correct predictions
about 70% of
the time.
Fisher, M.R.. 1958, A sector model-the
poultry industry
of the U.S.A., Econometrica,
26, 37-66. ST Annual 12 or 11
equation
models estimated
from 1915-1940
data by OLS.
LISE and Cochrane-Orcutt
methods.
Sought to determine
demand-supply
simultaneity.
Poor price prediction
in backcasts to 1913-1914 suggested
(p. 62) .
that a number of
naive models would be able to do better.
Foote, R.J. and H. Weingarten,
1958. Alternative
methods
for estimating
changes in production
from data on acreage
and condition,
Agricultural
Economics
Research.
10, 20-26.
R OU CO Compares
forecasting
methods that use intentions
to plant data with methods that use only past or projected
acreage and yield. Generally,
use of intentions data explains
about 60-800/o of actual variation
in production;
methods
that do not use intentions
data explain about 20-50%
of
variation.
Foote,
R.J., 1953, A four-equation
model of the feedlivestock economy and its endogenous
mechanism,
Journal of
Farm Economics.
35, 44-61. ST Annual model converted
to
semi-annual
to make a 25 year projection.
Foote.
R.J., J.A. Craven and R.P. Williams, Jr., 1972.
Quarterly
models to predict
cash prices of pork bellies,
Economics,
54.603-610.
ST
A three equation recursive sectoral model, estimated by 2SL.S.
Foote,
R.J.,
R.R. Williams,
Jr. and J. Craven.
1973,
Quarterly
and Shorter-term
Price Forecasting
Models Relating to Cash and Futures Quotations
for Pork Bellies USDAERS Technical
Bulletin Number
1482, 71 pp. SN ST CO
Single equations
for liveweight and number of barrow/gilts
and sows both by quarter and by month (each time period
estimated
separately).
120
P.G. Allen I International Journal of Forecusting 10 (1944) 81-135
Foote.
R.J., S.K. Roy and G. Sadler,
1976, Quarterly
prediction
models for live hog prices, Southern
Journal
of
Agricultural
Economics,
8, 123-129.
ST A four equation
sectoral model. each quarter separately
estimated.
Fox, K.A.,
1953. Factors affecting the accuracy
of price
forecasts,
Journal
of Farm Economics,
35, 323-340.
R SN
Discusses difference
hetween standard error of estimate and
standard
error of forecast;
difference
between independent
variables
known and forecast.
Compares
standard
errors in
30 prices with actual for years 1947-1952.
Fox. K.A., 1965, A submodel of the agricultural
sector. in
J.S. Duesenberry.
G. Fromm,
L.R.
Klein and E. Kuh
(editors).
The Brookings
Quarterly
Econometric
Model of
the United States (Rand-McNally,
Chicago). Chapter 12. pp.
409-464.
LA A 15 equation
price and farm income determination
model of livestock and crop food products.
No
forecasts.
Fox, K.A.. 1073. An appraisal of deficiencies in food price
forecasting
for 1973 and recommendations
for improvement,
Council of Economic
Advisors, Washington,
DC. EV.
Franzmann,
J.R. and R.L. Walker, 1972, Trend models of
feeder. slaughter
and wholesale beef prices, American
Economics.
54, 5077512.
TS Single
equation
spectral analysis.
Freebairn,
J.W..
1973. Some estimates
of supply and
inventory
response functions for the cattle and sheep sector
of New South Wales, Review of Marketing
and Agricultural
Economics,
41, 53-90. LA Annual
1X equation
model. No
forecasts.
Freebairn,
J.W., 1975, Forecasting
for Australian
agriculture, Australian
Economics,
19, 1544
174. R TS OU CO Reviews techniques.
Compares
naive or
univariate
forecasts with I year ahead Bureau of Agricultural
Economics
(BAE)
outlook
forecasts
for ten Australian
agricultural
commodity
prices and ten outputs over 8 years.
BAE more accurate for seven prices and nine quantities.
Frccbairn,
J.W.. 1978. An evaluation
of outlook
information for Australian
agricultural
commodities.
Review of
Marketing
and Agricultural
Economics,
46. 2944314. R OU
EV Information
required.
current USC, future prospects
and
economic
benefits from more accurate outlook.
Freebairn.
J.W. and G.C.
Rausser,
1975. Effects
of
changes in the level of U.S. beef imports, American Journal
of Agricultural
Economics,
57. 676-68X.
LA Annual
20
simultaneous
equation
model of the fed and non-fed beef.
pork and chicken sectors. Referenced
by Arzac and Wilkinson ( 1979) as the most complete econometric
study of the
livestock sector.
Freebairn.
J.W.. G.C. Rausser and H. de Gorter.
lY82,
Food and agriculture
sector linkages to the international
and
domestic
macroeconomies.
in G. C. Rausser (editor), New
Directions
in Econometric
Modeling and Forecasting
in U.S.
Agriculture
(North-Holland,
New York), Chapter
17, pp.
503-545.
R LA Reviews the three generations
of large scale
econometric
models. Describes
a quarterly
third generation
model with X7 equations covering three crop and six livestock
groups. No forecasts.
Fromm.
G., 1973, Implications
to and from economic
theory in models of complex systems, American
Journal of
Agricultural
Economics,
55. 259-271.
LA Review of strut.
ture and features of ten large scale macroeconomic
models.
Discussions
by Christ and Rausser.
Fuller. W.A. and G.W. Ladd, lY61. A dynamic quarterly
model of the beef and pork economy,
Journal
of Farm
Economics,
43, 797-812.
ST Specifies eight equations
estimated by single equation
methods.
Furniss, 1.F. and B. Gustafsson,
1968. Projecting Canadian
dairy farm structure
using Markov
processes,
Canadian
Economics.
16, 64-78. R PR Transition probability
matrix for number of cows per farm (eight
states,
two absorbing)
constructed
from 1061 and 1966
censuses for Canada.
Quebec and Ontario.
Furtan. W.H.. T.Y. Bayri, R. Gray and G.G. Storey. 1989.
Grain market outlook
(Economic
Council of Canada.
Ottawa). 101 pp. ou.
Gallagher.
P.. 19X6, U.S. Corn yield capacity and probability: estimation
and forecasting
with nonsymmetric
disturbances. North Central Journal of Agricultural
Economics.
8.
lOYY122. SN Shows difference in point and interval forecasts
when nonsymmetric
(y) distribution
used compared
with
normal.
Garcia.
P., M.A. Hudson
and M.L. Wailer,
1988, The
pricing efficiency of agricultural
futures markets: an analysis
of previous research results. Southern Journal of Agricultural
Economics,
20. l-19-130.
MK A meta-analysis
(50 referenccs) of 3X studies. Uses logit analysis.
Garcia,
P., R.M. Lcuthold,
T.R. Fortenbery
and G.F.
Sarassoro,
198X, Pricing efficiency in the live cattle futures
market:
further interpretation
and measurement,
American
Economics.
70, 1622169. SN TS CO
Compares
econometric.
ARIMA,
composite
and futures
price forecasts 1 to 6 months ahead, with updating of models.
Simple average composite
of ARIMA and econometric
with
latest 72 observations,
generally has lowest MSE and futures
price generally
highest.
However,
simulated
trading in the
market using the best-to-date
model gave small profit relative
to variance.
Gellatly. C.. 1079. Forecasting
N.S.W. heef production:
an
evaluation
of alternative
techniques.
Review of Marketing
and Agricultural
Economics.
47, X1-94. SN TS CO Compares
single equation,
ARIMA.
naive, expert and pairwise combinations. Quarterly.
Expert and its combinations
more accurate but see Revel1 (IYXI) and reply by Gellatly.
Gellatly,
C., 1981, Forecasting
NSW beef production:
a
reply, Review of Marketing
and Agricultural
Economics.
40,
127-130. TS CO Estimates
and compares
two new AROMA
models with those in Gellatly (1979) in response to comment
by Revel1 (1981). Revised ARIMA
is best.
Gertel. K. and L. Atkinson.
1993. Structured
Models and
Automated
Alternatives
For Forecasting
Farmland
Prices
USDA-ERS
Technical
Bulletin Nunber 1824, 22 pp. TS CO
Compares
ability of OLS and univariate
methods to detect
trend reversals
and the performance
of several univariate
methods
at I year and 2 year ahead forecasts in the 1Y73-
P.G. Allen i International Journal of Forecasting 10 (1994) 81-13.5

1987 period. For both RMSE and MAPE, varying parameter
regression
ranks best, then OLS, multivariate
state space and
trend autoregression
on OLS residuals.
For the hold/sell
investment
decision from various points in 1973-1987
to a
1990 horizon,
fewest wrong indicators
are issued by VPR,
then trend autoregression,
OLS, MSS.
Gerlow,
M.E. and S. Irwin, 1991, Can economists
accurately predict commodity
prices, presented
at the International Symposium
of Forecasting,
New York. OU CO Compares forecasts of hog and cattle prices 1974-1989 by USDA
and three land-grant
universities.
Naive random walk model
produced
lower RMSE errors than any outlook forecast, but
outlook reports have significant ability to forecast large price
changes.
Gil, J.M. and L.M. Albisu, 1993, Composite
rorecasting
methods:
an application
to Spanish maize prices. Journal of
Agricutural
Economics,
44, 264-271.
SN TS CO Compares
five forms of composite
based on exponential
smoothing,
ARIMA
and econometric
model forecasts.
(Uses all pairs
and all three models.) Ridge regression
composite
generally
has slightly lower RMSE and MAPE than simple averaging.
Composite
of three models best. For turning point forecasts,
simple averaging
always as good as or better than any other
composite.
Giles, D.E.A.
and B.A. Goss, 1981, Futures
prices as
forecasts
of commodity
spot pnces: live cattle and wool,
Australian
Economics.
25, 1-13. MK
Similar to US findings of Tomek
and Gray (1970) and
Leuthold
(1974).
Goddard,
E., 1985, The future role of the agricultural
economist
in outlook
preparation,
Canadian
Journal
of
Agricultural
Economics,
22, 86-99. OU EV Describes types
of forecasting,
advantages
and disadvantages.
Gold.
B., 1974, From backcasting
towards
forecasting,
Omega, 2, 209-223.
R SN Using linear or exponential
trend
regression,
compares
15 agricultural
and 13 non-agricultural
annual series for best length of data series (10, 15 or 20
years) to make long-term
forecasts (10, 15 or 20 years). For
agriculture
series. longer series are better. but for the others
the reverse is true.
Goodwin,
B.K.,
1992, Forecasting
cattle prices in the
presence
of structural
change, Southern
Journal of Agricultural Economics,
24, 11-22. TS CO A six-variable
gradual
switching VAR model (see Tsurumi et al., 1986, Journal of
Econometrics,
21, 235-253) had lower forecast
RMSE of
quarterly
cattle prices than univariate
ARIMA
which was
better than a (random walk) time-varying
VAR model (see
Wolff. 1987, Journal of Business and Economic Statistics, 5.
87-97).
Graham.
J.D. and G.R. Winter, 1974, A spatial model for
analysis of the Canadian livestock-feed
and livestock product
sector,
Proceedings
of the 1974 CAES Annual
Meeting,
Quebec City. pp. 51-74. ST PG A ten region interregional
programming
model. Attempted
validation.
not forecasting.
Granger,
C.W.J. and R. Ramanathan,
1984, Improved
methods
of combining
forecasts,
3.
197-204.
TS Uses Bessler and Brandt (1981) hog data to
121
show that composite

formed
by unrestricted
regression
is
most accurate.
Grisley, W. and E.D. Kellogg, 1983, Farmers subjective
probabilities
in Northern
Thailand:
an elicitation
analysis,
American
Economics,
65, 74-82. R
PR Believed to be the first economic study to use substantial
monetary
rewards (up to 1 days pay) as incentives to elicit
accurate subjective
probability
assessments.
Used the visual
impact (visual counter) method on a sample of 39 small-scale
farmers
to get distributions
on future prices and yields of
their rice, tobacco, soybean and peanut crops.
Grisley, W. and E.D. Kellogg,
1985, Farmers subjective
probabilities
in Northern
Thailand:
reply, American
Journal
of Agricultural
Economics,
67, 149-152.
PR In reply to
Knight et al. admits that the linear scoring rule used can be
improper
but (1) is easy to communicate
(2) not necessarily
improper for risk averse individuals (as these were) and (3) is
less important
than getting
the individuals
to take the
elicitation
process seriously.
Gruen,
F.H. et al., 1967, Long Term Projections
of
Agricultural
Supply and Demand,
Australia
1965 to 1980,
Department
of Economics,
Monash
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Clayton,
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LA.
Gunnelson,
G., W.D. Dobson
and S. Pamperin.
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Analysis
of the accuracy
of the USDA
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Economics,
54. 639-645. R
OU CO Analyses 1100 crop production
forecasts for barley.
corn, oats, potatoes,
soybeans,
spring wheat and winter
wheat for 1929-1970.
Makes successive pairwise comparisons
of naive no change
forecast,
initial and revised USDA
forecasts.
Uses three criteria: accuracy improvement
(Theils
revision
ratio statistic,
R), absolute
forecasting
error and
bias.
Haidacher,
R.C.. 1970. Some suggestions
for developing
new models
from existing
models,
American
Journal
of
Agricultural
Economics,
52, 814-819.
ST EV A critique.
Most price analysis models not used for forecasting.
Haidacher,
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Harlow.
A.A.,
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Affecting
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Supply
of Hogs USDA-ERS
Technical
Bulletin
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1274, 85 pp. ST A six equation
quarterly
model of US hog
industry.
Eight post-sample
one step ahead forecasts
had
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Harns,
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outlook programs:
a
review and some suggestions,
Southern
8, 139-149. OU EV Based on survey of 15
agricultural
economics
departments.
Harris,
K.S.,
1983, Model selection
among alternative
steer price forecasting
techniques.
paper presented
at the
American
Agricultural
Economics
Association
meetings,
West Lafayette,
IN, 31 July-3 August 1983, 13 pp. (Abstract
in American
Economics,
65, 1185.)
SN TS CO Same data and results as Harris and Leuthold
(1985).
Harris, K.S. and R.M. Leuthold,
1985, A comparison
of
122
P.G. Allen I lnternutional Journal of Forecusting
alternative
forecasting
techniques
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study, North Central Journal of Agricultural
Economics.
7.
40-50. SN TS CO Compares
single equation OLS, ARIMA.
composite,
GLS and multivariate
ARMA models of cattle
and hog prices.
Harvey. D.R. and H.B. Huff, 1974. A linear programming
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grains model, Proceedings
of the 1974 CAES
Annual
Meeting.
Quebec City. pp. 75-87. ST PG A seven
region
static feed grain-beef
interregional
programming
model. No forecasting.
Hauser.
R.J. and D.K. Andersen,
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with
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an illustration
of pricing
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American
Economics. 69. 38-45. TS CO Comparison
of forecasts of monthly
variance
of daily November
soybean
futures
prices finds
ARIMA
most accurate then econometric
then naive model.
Hayami. Y. and W. Peterson.
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information
services: statistical reporting
of U.S. farm commodities.
American
Economic
Review.
62, I lY-130.
PR
Uses
inventory
adjustment
model.
If decision
makers
adopted
USDA
production
forecasts,
then reduction
in
average
forecast
error
from 3% to 1% would increase
aggregate
economic surplus about 6% of gross value of crops
and about 1% of gross value of livestock products.
Hayenga,
M. and D. Hacklander.
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relationships
for fed cattle and hogs. American
Journal
of Agricultural
Economics,
52, 535-544.
ST A five
equation
system. No validation.
Hayward,
R.A..
G.K. Criner
and S.P. Skinner,
1984.
Apple price and production
forecasts
for Maine and the
United
States.
Northeastern
Journal
of Agricultural
and
Resource
Econorrucs.
13, 268-276.
ST A five equation
annual model that uses both dynamic and static simulation
within-sample
and assumed values of exogenous
variables to
make forecasts.
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on commodity)
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actual
price,
mean
error
and distribution
of individual
forecasts.
Also probability
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Hedley. D.D. and H.B. Huff. 1985. Utilization
of institutional and quantitative
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some
management
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forecasting
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Agriculture
Canada.
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equation
potato model, with 4 years of forecasts.
Heicn, D.. lY7.5. An econometric
model of the U.S. pork
economy.
Review of Economics
and Statistics. 57, 370-375.
ST Annual seven equation
model, with 4 years of forecasts.
H&n.
D.. lY76, An economic analysis of the U.S. poultry
sector.
American
Journal
of Agricultural
Economics,
5X.
10 (1994) Xl -135
311-316.
ST Annual
17 equation
model of the broiler and
turkey industries,
with 4 years of forecasts.
Helmers,
G.A.
and L.J. Held,
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of
livestock price forecasting
using simple techniques,
forward
pricing.
and outlook
information,
Western Journal
of Agricultural
Economics,
I, 1577160. TS CO Compares three
forms of naive forecast,
moving average,
Irend regression.
futures price and two expert forecasts
4 months ahead as
guides for fattening
steers and hogs. USDA outlook
has
generally
smallest
bias and least MSE. Naive based on
present price was next best.
Hendricks.
W.A., 1963. Forecasting
yields with objective
measurements,
Journal of Farm Economics.
45, 1508-1513.
OU Definition.
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Hendricks,
W.A. and H.F. Huddleston,
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forecasts
of cotton yield, Agricultural
Economics
Research,
9. 20-25.
R OU Describes
relation
between
counts
of
different
kinds of fruits surveyed
on 1 August
and final
numbers
of bolls. and between
fruit count per plant and
average weight per fruit based on surveys in 1954 and 1955.
Relations
used for a state by state forecast of cotton yield in
1956 in a ten state region.
Henson, W.L.. 1971. Use of predictive
equations
to forecast monthly average New York egg prices. in G.B. Rogers
and L.A. Voss (editors).
Readings in Egg Pricing University
of Missouri-Columbia.
MP 240, pp. 156-168. SN.
Higgs. P.J.. 1986, Adaptation
and Survival in Australian
Agriculture
(Oxford
University
Press, Melbourne.
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Hinchy, M., 1978. The relationship
between beef prices in
export
markets
and Australian
saleyard
prices, Quarterly
Economics.
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for lead-lag
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G..
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livestock
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Agricultural
Economics,
2, 145%150. OU EV Cash prices
affected by information
in report but not futures prices.
Hoffman,
R.G..
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egg production
estimators,
Southern
Journal
of Agricultural
Economics,
2.
l<S-160.
ST An eight equation
quarterly
US model. with
four quarters
of total egg production
forecasts.
Holt,
M.T. and J.A.
Brandt,
1985, Combining
price
forecasting
with hedging of hogs: an evaluation
using alternativ,e measures
of risk, Journal
of Futures
Markets,
5,
2977309.
SN TS CO Similar to Brandt
(1985) but with
monthly
data. Compares
econometric,
ARIMA.
composite
and seasonal
index forecasts
of hog price 2 to 10 months
ahead. Risk neutral and risk averse producers
are better off
from using the forecasts
to create
or liquidate
selective
hedges compared
with routine and no hedging strategies.
Hopkins,
Jr., J.A.. 1927, Forecasting
cattle prices, Journal
of Farm Economics,
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Houck, J.P., 1064, A statistical model of the demand for
soybeans,
Journal
of Farm Economics,
46, 366-374.
ST
Annual six equation
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P.G. Allen I International Journul of Forecasting

House. C.C., 1979. Forecasting
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68 pp. CO.
Huang, K.S., 1989, A forecasting
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Applied Economics.
21. 1235-1246.
LA.
Huang, K.S., 1993, A Complete
System of U.S. Demand
for Food USDA-ERS
Technical
Bulletin Number
1821. 70
pp. LA Estimates by a constrained
maximum
likelihood
method
own- and cross-price
and expenditure
elasticities
from a first order differential
linear-inparameters
system of
39 food categories
and non-food
using 1953-1990
annual
data. Percent
RMSE and MAPE calculated
from withinsample static simulation
over the whole estimation
period.
For 39 food groups,
RMSE values range 1.38%-9.06%.
median 4.12%. MAPE 1.0X%-7.60%.
median 3.28%.
Huddleston,
H.F.. 1958, Objective methods in forecasting
components
of corn yield, Agricultural
Economics
Research,
10. 49-53. R OU On 1 August. number of ears forecast from
stalk count. Weight of grain forecast from number of ears in
60 feet of row.
Hudson,
S.C. and I.F. Furniss.
1966, Use of outlook in
Canadian
agriculture,
48, 11601167. R OU Origins, objectives.
Huff, H.B. and M. Peckett,
1978. A quarterly forecasting
model of the Canadian
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in Agriculture
Canada,
Commodity
Forecasting
Models for Canadian
Agriculture,
Vol. 1, coordinated
by Z.A. Hassan and H.B. Huff, Ottawa,
Canada.
publication
no. 7812, pp. 43-60. ST National
16
equation
model.
Hughes. D.W. and J.B. Penson, 1980, Description
and Use
of a Macroeconomic
Model of the U.S. Economy
which
Et?$hasizes
Agriculture
Texas A&M University,
Department
of Agricultural
Economics,
Departmental
Technical
Report
Number
DTR 80-5. R LA Annual third generation
model
with many linkages.
Hussey. D.D.. 1972, A Short Term Projection
Model for
Wool Prices-An
Explanatory
Analysis Bureau of Agricultural Economics
Occasional
Paper Number
7. OU Uses indicator analysis.
Ingco, M. and J. Ferris, 1983, An evaluation
of a combination of quarterly
and annual models in predicting
cattle and
hog prices. presented
at the American
Agricultural
Economics Association
annual
meetings,
West Lafayette,
IN.
(Abstract
in American Journal of Agricultural
Economics,
65
(December
1983). 1185). SN TY CO Annual demand equations for cattle and hogs combined
with quarterly
ratio
models
to produce
quarterly
models.
These were more
accurate
than
standard
quarterly
models
and ARIMA
models.
Irwin, S.H..
M.E. Gerlow
and T.-R.
Liu, 1991, The
market timing value of outlook price forecasts,
presented
at
the annual meeting of the American
Agricultural
Economics
Association.
Manhattan,
Kansas, 18 pp. OU CO Compares
four different
hog price outlooks
and three cattle price
outlooks
one. two and three quarters
ahead for ability to
predict
turning
points using regression-based
Merton test.
Three hog and one cattle price outlooks at one quarter ahead
10 (lW4)
81-135
123
have value in directional

indication.
but only the hog price
outlooks
are significantly
better than the forecast
from a
trend plus seasonal dummy variable regression.
Jaffrelot,
J.J., 1978, A model for forecasting
provincial hog
marketings,
pp. 61-75. in Agriculture
Canada,
Commodity
Forecasting
Models for Canadian
Agriculture.
Vol. 1. coordinated by Z.A. Hassan and H.B. Huff, Ottawa,
Canada,
publication
no. 7812. SN Set of nine cobweb-type
annual
single equations.
Jarrett.
F.G.. 1965. Short-term
forecasting
of Australian
wool prices. Australian
Economic
Paper, 4, 933102. R TS
Monthly
forecasts
of six grades
of wool using Winters
multiplicative
model compared
with simple moving average.
Referenced
by Labys and Granger (1970, p. 220) as the only
published
paper in which exponential
smoothing
is applied
directly to a commodity
price series.
Johnson,
S.R.,
1977, Discussion.
American
Journal
of
Agricultural
Economics.
69. 133-136.
LA EV Reviews the
second generation
models of Chen (1977) and Roop and
Zeitner (1977).
Johnson,
S.R.. H.B. Huff and G.C. Rausser.
1982. Institutionalizing
a large scale econometric
model: the case of
Agriculture
Canada,
in G.C. Rausser (editor), New Directions in Econometric
Modeling
and Forecasting
in U.S.
Agriculture
(North-Holland,
New York), Chapter
23. pp.
801-830.
R LA Notes that the model, implemented
from
1977 onwards,
was intended for both forecasting
and policy
analysis.
Jolly. L.O. and G. Wong, 1087. Composite
forecasting:
some empirical
results
using BAE short-term
forecasts.
Review of Marketing and Agricultural
Economics,
55. 51-73.
R IS CO Compares
citrus and sugar production
forecasts
from BAE ([Australian]
Bureau of Agricultural
Economics),
ARIMA.
naive and four composite
methods.
Jones. W. and M. Elward.
1990, Canadian
Farm Income:
Medium term outlook and value added accounts.
Canadian
Economics.
38. 603-614.
OU Gives
1990- 1995 forecasts.
Just, R.E..
1992, American
agricultural
supply.
in L.
Tweeten et al. (editors), Japanese and American Agriculture:
Tradition
and Progress
(Westview
Press), Chapter
16, pp.
31 l-348.
EV Contains
comparison
of annual acreage forecasts for US wheat and feed grain from (I ) acreage response
equation,
(2) acreage
response
equation
with exogenous
program participation
rate variable and (3) system of acreage
response equation and logistic participation
rate equation.
In
post-sample
forecasts.
1983-1986 or 1987. (3) is most accurate, (I) worst for feed grains; (2) best. (I) worst for wheat.
Most of emphasis is on ways to improve estimation of supply
response.
Just.
R.E.,
1993. Discovering
production
and supply
relationships:
present status and future opportunities,
Review
of Marketing
and Agricultural
Economics,
61. 11-40. R EV
The profession
has been too occupied with flexible functional
forms and duality analysis.
Recommends
structured
representation:
incorporating
economic
theory. imposing in csti-
124
mation
all of the economic
principles
and practical
information that is otherwise considered
in evaluating
plausibility
of results.
The result is models
with globally
plausible
functional
forms and implications.
The key criterion
for
SUCCC~S is the ability
to represent
out-of-sample
phenomena.
Just. R.E. and G.C. Rausser,
1981. Commodily
price
forecasting
with large scale econometric
models
and the
futures market.
American
Economics, 63. 197-208. R OU LA CO Compares
futures prices of
eight commodities
with USDA and four commercial
forccasts.
Just. R.E. and G.C. Rausser,
1089, An assessment
of the
agricultural
economics
profession,
American
Economics.
71. 1177-l 190. EV Notes failure of
agricultural
economists
to detect price changes in early 1970s
and early 1980s.
Just. R.E.. G.C. Rausser and D. Zilberman,
1992. Environmental
and Agricultural
policy linkages and reforms in
the United States under the GATT, in T. Becker. R.S. Gray
and A. Schmitz
(editors),
Improving
Agricultural
Trade
Performance
Under the GATT (Wissenschaftsverlag
Vauk.
Kiel, Germany),
Chapter
18. pp. 2544277. EV LA Contains
same comparison
of acreage forecasts
as Just (1992). Dcscribes
structure.
but no equation
estimates
of a highly
structured.
policy-oriented
model of the feed grain, soybean.
wheat and livestock (beef. pork, poultry)
sectors. Model is
estimated
with annual 1962 to 19866lY87 data. validated
by
dynamic
simulation
within sample.
and welfare
surpluses
presented
for 1985-1994 baseline (no policy change), uncoupled direct payments
(phaseout
of target and support price
payments)
and environmental
protection
(pesticide
restriction) scenarios.
Kalaitzandonakes.
N.G. and J.S. Shonkwiler.
1992. A
state-space
approach
to perennial
crop supply
analysis,
American
Journal
of Agricultural
Economics,
74. 343-3.52.
TS CO Graphical
comparison
only of within-sample
one step
ahead forecasts of annual total acreage of Florida grapefruits.
Forecasts from state-space
and single equation partial adjustment models.
Kaylen, M.S.. 1986, A note on the forecasting
of turning
points. North Central Journal of Agricultural
Economics.
8.
156-158.
R TS CO Modifies
turning
point criterion
to
differentiate
peaks from troughs. For three previous studies,
compares
with standard
turning point definition.
Kaylcn,
M.S.,
IYSX. Vector
autoregression
forecasting
models: recent developments
applied to the US hog market,
American
Economics.
70, 701-712. R
TS CO Reviews the exclusion-of-parameters
and Bayesian
approaches
to reducing
VAR parameters.
Proposes
new
approach
and compares
six VAR methods.
Kaylen. M.S. and J.A. Brandt, 1988. A note on qualitative
forecast evaluation:
comment.
American Journal of Agricultural Economics.
70, 415-416.
R TS A more precise definition of a turning
point criterion
than Naik and Leuthold
( IYSh), depending
on number of steps ahead forecast.
Kelly. B.W.. 1957, Preliminary
report on objective
procedures for soybean yield forecasts.
Agricultural
Economics
10 (1994) XI -13.5
Research.
9, 139-141.
R OU Study in which objective
was
solely to predict number of pods.
Kelly. B.W.. 1963, Probability
sampling in collecting farm
data. Journal
of Farm Economics,
45, 1515-1520.
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Research
Service methods.
Kelly, J. and W. Proctor,
1992, Supply and demand
projections
for grapes, Australian
Bureau of Agricultural
and
Resource
Economics.
National
Agricultural
and Resources
Outlook
Conference,
Canberra
1992, 5 pp. OU Summarizes
outlook.
describes methods.
evaluates
results.
Kerr, T.C. and R.K. Eyvindson,
1974. A model of the
feed grain sector of Canadian
agriculture,
Proceedings
of the
1974 CAES Annual Meeting.
Quebec City, pp. 31-50. ST
PG Interregional
programming.
Policy analysis, no forecasting.
Kingma, O.T., J.L. Longmire and A.B. Stoeckel, lY80. A
review of three research prograrns
in quantitative
modeling
in the Bureau of Agricultural
Economics,
Australian
Journal
of Agricultural
Economics.
24. 224-247.
R EV Covers
modeling
production
systems
(LP);
modeling
commodity
markets:
annual,
quarterly,
medium term (5 year) projections; progress:
1960s. single equation
aggregate
State or
national
models. mid 1970s (wool. livestock models) multiequation.
multi-enterprise
system, (Freebairn,
1973); forecasting ability (Freebairn
(1975), Bourke
(1079). Gellatly
(1979)):
modeling
macroeconomic
systems,
structural
GE
systems: the ORANI
module of the IMPACI project.
Approximately
90 references.
Kling, J.L. and D.A. Bcssler.
1985. A comparison
of
multivariate
forecasting
procedures
for economic time series.
International
1, 5-24. TS CO Comparts
six VAR methods
with exponential
smoothing
and
autoregressive
methods
for the hog market,
also for a
macroeconomic
model and an oil model. No consistency
of
results across data sets.
Knapp. K.C. and K. Konyar.
1991. Perennial crop supply
response:
a Kalman
filter approach,
American
Journal
of
Agricultural
Economics.
73, 841-849.
TS State space model
for alfalfa supply.
Knight. T., S.R. Johnson
and R. Finley, 1985, Farmers
subjective
probabilities
in Northern
Thailand:
Comment,
American
Economics.
67, 147-148.
PR Criticizes
Grisley
and Kellogg
(1983) for use of an
improper
scoring
rule in eliciting
subjective
probability
distributions.
Kofi. T.A..
1973, A framework
for comparing
the efficiency of futures markets. American Journal of Agricultural
Economics.
55. S84-594.
MK Cash price regressed
on
previous futures price. Hypothesis
test.
Kohn. P., 1955. Agricultural
outlook work, national
and
international.
37. 368-370. OU
Describes
Ezekiel (1953).
Konyar, K. and K. Knapp, 1990. Dynamic regional analysis of the California
alfalfa market with government
policy
impacts.
Western
Journal
of Agricultural
Economics,
157.
22-32. ST 25 county/region
demand and acreage regressions
used to forecast directly and in spatial equilibrium
model.
Konyar, K., I. McCormick

and T. Osborn, 1993, The U.S.
Agricultural
Resources
Model (USARM)
USDA-ERS
Staff
Report AGES 9317, 23 pp. LA Describes the nine crop (plus
conservation
reserve program),
12 region mathematical
programming
model and documentation
of its code (written in
GAMS and fully self-documented
with 1990 data embedded).
No results. Intended for policy analysis not forecasting.
Koontz, S.R., M.A. Hudson and W.D. Purcell, 1984, The
Impact of Hog and Pig Reports on Live Hog Futures Prices:
an Event Study of Market Efficiency Department
of Agncultural Economics
Staff Paper SP-84-11, Virginia Polytechnic
Institute and State University,
August 1984. MK.
Koontz,
S.R., M.A. Hudson
and M.W. Hughes,
1992,
Livestock
futures
markets
and rational
price formation:
evidence
for live cattle and live hogs, Southern
Journal of
Agricultural
Economics,
24, 233-249.
MK Rational
price
formation
(where prices for contracts reflect average cost of
production)
is generally supported
by distant live cattle and
live hog futures.
But after feeding commitments
are made.
market prices reflect expected market conditions.
Kost, W.E.. 1981, The agricultural
component
in macroeconomic
models, Agricultural
Economics
Research,
33. I10. R LA A survey of the individual
country
models in
project LINK. including a tabulation
of the number and type
of equations
and variables in the 25 overall models and in the
agricultural
sectors. Also reviews the international
models of
several commercial
macroeconomic
forecasters.
Kulshreshtha,
S.N., 1971, A short-run
model for forecasting monthly egg production
in Canada. Canadian Journal of
Agricultural
Economics,
19, 36-46. ST An eight equation
sectoral model.
Kulshreshtha,
S.N. and R.G.
Fisher,
1972, Predicting
regional
net marketings
of beef cattle in Saskatchewan,
Canadian
Economics,
20, 90-97. ST
A ten equation
annual sectoral model.
Kulshreshtha,
S.N. and C.-F. Ng, 1977, An econometric
analysis of the Canadian
egg market,
Canadian
Journal of
Agricultural
Economics,
25, 1-13. ST A 12 equation quarterly sector model.
Kulshreshtha,
S.N. and E.W. Reimer, 1975. An integrated
econometric
model of the Canadian
livestock-feed
sector,
Canadian
Economics.
23, 13-32. LA
An 82 equation annual model of seven livestock products and
eight feeds.
Kulshreshtha,
S.N. and K.A. Rosaasen,
1980, A monthly
price forecasting
model for cattle and calves.
Canadian
Journal
of Agricultural
Economics,
28, 41-62.
ST A 26
equation
monthly model of the Canadian
cattle sector.
Kulshreshtha.
S.N. and A.G. Wilson,
1972, An open
econometric
model
of the Canadian
beef cattle
sector,
American
Economics,
54, 84-91. ST
A nine equation
annual model.
Kulshreshtha,
S.N. and A.G. Wilson, 1973, A harmonic
analysis of cattle and hog cycles in Canada, Canadian Journal
of Agricultural
Economics,
21, 34-45. SN Single equation
monthly estimations
for prices at five locations.
slaughter
at
national level and in seven regions/provinces.
125
Kulshreshtha.
S.N., J.D. Spriggs and A. Akinfemiwa,
1982, A Comparison
of Alternative
Approaches
to Forecasting Cattle Prices in Canada,
Department
of Agricultural
Economics
Technical
Bulletin 82-01. University
of Saskatchewan.
69 pp. R TS CO Compares
five approaches
each
with and without variable updating
for forecasting
monthly
slaughter
steer and feeder steer prices. Composite
method
most accurate and has best turning point performance
for all
horizons (6, 12 and 36 months) when variables updated,
but
generally poor when variables not updated.
Kunze, J., 1990, The Bureau of Agricultural
Economics
outlook
program
in the 1920s as a pedagogical
device,
Agricultural
History,
64, 252-261.
R OU Outlook
as a
teaching device, not for information
transfer.
Kutish, F.A., 1955, Needed changes in state and local crop
and livestock reports, Journal of Farm Economics,
37, 10501053. OU To increase accuracy of livestock slaughter
forecasts, quarterly
reports should contain breeding
intentions
data by month.
Labys,
W.C.,
1975, The problems
and challenges
for
international
commodity
models and model builders, American Journal of Agricultural
Economics,
57, 873-878.
R LA
ST EV Naive or no change models superior to econometric.
Labys.
W.C.,
1987, Primary
commodity
markets
and
models: an international
bibliography
(Gower Press, Aldershot, UK), 290 pp. ST.
Labys.
W.C. and C.W.J.
Granger,
1970, Speculation.
Hedging
and Commodity
Price Forecasts
(Heath Lexington
Books, Lexington,
MA), 321 pp. TS CO Chapter
2 introduces spectral
analysis,
Chapters
3-8 develop
a general
model of price fluctuations
for both cash and futures markets.
Chapter 9 compares forecasts from econometric.
time series
methods and naive for six agricultural
commodities.
Ladd,
G.W. and Y. Kongtong,
1979, Use of planting
intentions
to predict actual plantings,
North Central Journal
of Agricultural
Economics,
1, 97-104. R OU SN EV CO For
six grain crops, use of intentions
data combined with objective data (price, expected yield of crop and competing crops)
better than either alone.
Lakshminarayan,
S., R. Lakshmanan,
R.L. Papineau and
R. Rochette,
1977, Box-Jenkins
model for the broiler
chicken
industry,
Canadian
Journal
of Agricultural
Economics. 25, 68-72. TS Monthly model of the Canadian broiler
industry.
Lamm. Jr., R.M., 1981. Aggegate
Food Demand and the
Supply of Agricultural
Products
USDA-ESS
Technical
Bulletin Number 1656, 18 pp. LA Highly aggregate
annual third
generation
four equation
model. Makes forecasts for 19811985.
Larson,
A.B., 1964, The hog cycle as harmonic
motion.
Journal
of Farm Economics,
46, 375-386.
TS Theory,
no
empirical analysis.
Lattimore,
R. and A.C. Zwart. 1978, Medium term world
wheat forecasting
model, in Agriculture
Canada, Commodity
Forecasting
Models for Canadian
Agriculture.
Vol. 2, coordinated by Z.A. Hassan and H.B. Huff, Ottawa,
Canada.
publication
no. 7813, pp. 87-106.
ST Econometric
annual
model with IX supply and demand

regions,
inventory
dcmands for six major countries
and policy intervention
modelled explicitly for five regions (US. Canada,
EECB. EEC3.
Japan).
Lave. L.B., 1063. The value of better weather information
to the raisin industry.
Econometrica.
31. 151-164.
OU A
perfect
weather
forecast
over the drying
interval
(two
periods.
about 3 weeks) could increase
a California
raisin
grape growers expected profit by $91 per acre compared with
the hest harvest strategy followed in the absence of a weather
forecast.
Providing
a forecast
may raise total raisin production.
lowering the per acre value of information.
Lee. B.M.S.
and A. Bui-Lan.
1982. Use of errors of
prediction
in improving
forecast accuracy:
an application
to
wool in Australia,
Australian
Economics.
6. 49-62.
OU CUSUM
analysis
to analyse
BAE
forecasts
of price and production.
LEsperance,
W.L.. 1964. A case study in prediction:
the
market for watermelons.
Econometrica,
32, 163-173. SN ST
CO Forecast
accuracy and turning point performance
better
from three simultaneous
equation
system than in reduced
form single equations.
Leuthold.
R.M.,
1974, The price performance
on the
futures
markets
of a nonstoreablc
commodity:
live beef
cattle.
American
Journal
of Agricultural
Economics.
55.
271-275). MK Teats efficiency
and bias of futures price as
forecast
of closing price by rcgrcssion
using monthly data.
Calculates
MSE treating the delivery price as actual and the
futures price or cash price up to 36 weeks prior as forecast.
MSE futures larger than MSE cash for ahout IS or more
weeks prior to delivery date.
Leuthold.
R.M..
1975. On the use of Theils inequality
coefficient.
American
Economics.
57,
344-346.
R TS Points out misuse of Theils U,.
Lcuthold,
R.M.. IYhY. An analysis of daily fluctuations
in
the hog economy.
American
Economics. 51. X4%X65. SN Single equation demand (price) and
supply (quantity)
forecasts one day ahcad.
Leuthold.
R.M. and P.A. Hartman,
1979. A semi-strong
form evaluation
of the efficiency of the hog futures market,
American
Journal
of Agricultural
Economics.
61. 4X2-4X9.
MK Compares
futures price prediction
with that from two
equation
(price and quantity)
econometric
model.
Leuthold.
R.M. and P.A. Hartman.
19X1. An evaluation
of
the forward
pricing efficiency of livestock futures markets.
North Central Journal of Agricultural
Economics.
3. 71-X0.
R ST CO MK Compares
forecasting
performance
of quarterly econometric
model. futures price and composite
for live
hogs (three
equation),
pork hcllies (three
equation.
see
Foote ct al.. lY73). cattlc (two equation).
l.euthold.
R.M.,
A.J.A.
MacCormick.
A. Schmitz and
D.Ci. Watts.
1070. Forecasting
daily hog prices and quantities: a study of alternative
forecasting
techniques.
Journal of
the American
Statistical
Association.
65, YO-107. R TS CO
Econometric
model outperforms
ARIMA
and random walk
models for one step ahead forecasting.
LIU, D.J.. P.J. Chang and W.N. Meyers, 1993. The impact
of domestic
and foreign macroeconomic
variables
on U.S.
meat exports, Agricultural
and Resource Economics
Review.
22. 210-221.
LA Quarterly
eight equation
VAR model of
beef. pork, turkey and chicken export quantities
and domestic retail prices linked recursively
(i.e. with no feedback) to a
nine equation
VAR model of the US and rest of world
macroeconomy.
Extensive test battery and dynamic (one step
ahead)
forecast
validation
applied
within-sample.
Withinsample policy simulations.
Lowenstein.
F., 1954. Variations
in crop forecasts
for
cotton.
Journal
of Farm Economics,
36. 674-680.
R OU
Reports distribution
of US production
forecast error over 3X
years. Biases statistically
insignificant.
Errors decrease with
successive
seasonal
forecasts.
August forecast
accounts
for
X4% of annual change in production.
Loyns. R.M.A.
and W.F. Lu, 1973, A cross sectional and
time-series
analysis
of Canadian
egg demand,
Canadian
Journal
of Agricultural
Economics.
21. l-15. SN National
monthly single equation
model.
MacAulay,
T.G..
1978. A forecasting
model
for the
Canadian
and US pork sectors.
pp. 12X. in Agriculture
Canada.
Commodity
Forecasting
Models for Canadian
Agriculture.Vol.
2. coordinated
by Z.A. Hassan and H.B. Huff.
Ottawa.
Canada.
publication
no. 7X/3. R ST PG Recursive
three region (US. East and West Canada) spatial equilibrium
model with consumption,
closing stock demand and supply
for each region and exogenous
rest of world trading.
MacAulay.
T.G..
H.B. Huff and S.B. Chin.
lY74. A
recursive
spatial equilibrium
model of the North American
beef industry.
Proceedings
of the 1974 CAES Annual Meeting. Quebec City. pp. X8-101). ST PG Similar to Martin and
Zwart for hogs.
MacDonald.
S.. IYYl, The Accuracy
of USDAs Export
Forecasts
USDA-ERS-CED
Staff Report
Number
AGES
9224, 46 pp. OU Reports MAPE for forecasts of annual value
of exports
of 1.3 commodity
groups and volume of nine
groups. Regressions
of change in actual as function of change
in forecast
find some significant
bias (mostly upwards)
and
\omc inconsistency
(slope signilicantly
different from one) in
various commodities
and regions.
MacLaren.
D.. 1977. Forecasting
wholesale price of meats
in the United Kingdom:
an exploratory
statement
of some
alternative
econometric
models.
Journal
of Agricultural
Economics.
2X. OY%II I. SN CO Compares
the predictive
performance
of five econometric
methods for five wholesale
meat prices. Naive no change model generally performs better.
Maki, W.R.. lY62. Decomposition
of the beef and pork
cycles. Journal of Farm Economics.
44. 731-748.
SN Single
equation
annual or semi-annual
estimations
with predictions
for number.
slaughter
and price.
Maki. W.R., 196.7. Forecasting
livestock supplies and prices
with an econometric
model. Journal of Farm Economics.
45,
612-624.
R LA A 44 equation
recursive system.
Marsh, J.M..
1983, A rational
distributed
lag model of
quarterly
live cattle prices. American Journal of Agricultural
Economics.
65. S3Y-547. SN Single equation
reduced form
price relation.
P.G. Allen
Marsh. J.M., 1984, Estimating

slaughter
supply response
for U.S. cattle and hogs, North Central Journal of Agricultural Economics,
6, 18-28. SN Quarterly
single equation
estimation
and forecasting
of three categories
of cattle and
two of hogs.
Martin,
L. and P. Garcia,
1981, The price forecasting
performance
of futures markets for live cattle and hogs: a
disaggregated
analysis,
American
Journal
of Agricultural
Economics,
63, 209-215.
CO MK Hog futures market provides better forecast than lagged cash price, but not cattle.
Martin,
L. and A.C. Zwart,
1974, Hog sector models,
Proceedings
of the 1974 CAES Annual
Meeting,
Quebec
City, pp. 101-105. ST Spatial equilibrium
model. Simulation
1963-1973.
Martin, L. and A.C. Zwart, 1975. A spatial and temporal
model of the North American pork sector for the evaluation
of policy alternatives.
American
Journal
of Agricultural
Economics,
57, 55-66. R ST PG Quarterly
recursive quadratic programming
model.
McClements,
L.D.,
1970, Econometric
forecasts
of pig
supply, Applied Economics.
2. 27-34. ST A three equation
model based on authors four equation model in A model of
pig supply Journal of Agricuhral
Economics, 20 (1969):
241-250. Forecasts
of pig slaughter
two and three quarters
ahead based on actual or forecast breeding stocks are better
than naive, but use of contemporaneous
explanatory
price
variables not accounted
for.
McFarquhar,
A.M.M.
and M.C. Evans. 1971, Projection
models for U.K. food and agriculture,
22, 321-345.
ST Six models: (1) consumer
expenditure
(linear expenditure
system) for 27 food plus
nonfood used as final demands in (2) input-output
model for
39 agricultural
and non-agricultural
products.
(3) three
equation
wheat, (4) two equation
barley, (5) 20 equation
annual cattle and (6) six equation sheep models.
McIntosh,
C.S. and D.A. Bessler, 1988. Forecasting
agricultural prices using a bayesian composite approach,
Southern Journal
of Agricultural
Economics,
20, 73-80. TS CO
Describes
composite
approach
using matrix of pairwise beta
distributions
with Dirichlet diagonal conjugate
priors. Compares US hog price forecasts
using expert, futures market,
ARIMA,
bayesian
composite
and three other composite
approaches.
McIntosh,
C.S. and J.H. Dorfman,
1990. A price forecasting competition:
introduction,
American
72, 786-787.
R TS CO Describes
their
little-Mak
competition.
See Dorfman
and McIntosh (1990)
for results. See Berck and Chalfant
(1990), Bessler (1990).
Criddle and Havenner
(1990) for individual methods.
McIntosh,
C.S. and J.H.
Dorfman,
1992, Qualitative
forecast evaluation:
a comparison
of two performance
measures, American Journal of Agricultural
Economics,
74, 209214. R TS CO For the hog price series and seven methods of
Brandt and Bessler (1981), compares turning point rankings
using both the ratio of accurate to worst forecasts (Naik and
Leuthold,
1986) and the Henriksson-Merton
confidence
level.
10 (1994) 81- 135
127
Meilke. K.D., 1977, Another

look at the hog-corn
ratio,
American
Economics,
69, 216-219.
SN Single equation
distributed
lag models forecasts
compared.
Meilke. K.D. and H. de Gorter.
1978, A quarterly econometric model of the North American feed grain industry, pp.
15-42,
in Agriculture
Canada.
Commodity
Forecasting
Models for Canadian
Agriculture.
Vol. 1, coordinated
by
Z.A. Hassan and H.B. Huff. Ottawa,
Canada,
publication
no. 7812. ST An 18 equation
system of US. west and east
Canada.
Menkaus,
D.J. and R.M. Adams, 1981, Forecasting
price
movements:
an application
of discriminant
analysis, Western
Journal
of Agricultural
Economics,
6, 2299238.
SN CO
Annual single equation
binary dependent
variable model of
feeder/yearling
cattle price movement
as function of other
prices and inventory
change.
Meyer.
L.A. and R. Skinner,
1992, An assessment
of
USDAs cotton supply and demand estimates,
Cotton and
Wool Situation
and Outlook
Report USDA-ERS
CWS-67.
pp. 104-117. OU Calculates
average forecast (as percentage
of final) and 95% confidence
interval for annual production,
export.
mill use, total use and ending stock quantities
of
cotton each month of the crop year (August-July)
from
1980-1090
for US domestic
and rest of world. Tabulated
forecast
and final estimate
values
permit
calculation
of
standard
forecast
accuracy
statistics.
No comparisons
with
other forecast methods.
Midmore,
P., 1993, Input-output
forecasting
of regional
agricultural
policy impacts.
Journal
of Agricultural
Economics, 44, 284-300.
LA Accuracy
of forecasts of the Welsh
agricultural
sector from eight input-output
tables rapidly
declines as horizon increases because of insufficient attention
to final demand forecasts. spill-over effects into other sectors
and functional
relations between labor and output.
Miller. B.R. and R. Jelinek,
1982, Relative accuracy of
price expectations
held by Georgia
farmers
and by other
forecast
sources in 1980, University
of Georgia College of
Agriculture
Experiment
Station Research
Bulletin Number
286, 33 pp. LA CO Compares
forecasts 3 months ahead for
October prices of corn. soybeans,
feeder and steer cattle and
hogs. Forecasts
by experts (farmer
survey),
futures price,
naive. simple average composite
of the above and four large
scale
econometric
models
(Chase,
DRI.
Wharton
and
OASIS). No significant difference in forecasting
performance
according
to Mann-Whitney
(I test on either RMSE, MAPE
or Theils li, criterion.
Miller. B.R. and G.C. Masters,
1073, A short run price
prediction
model for eggs, American
Economics.
55, 4844489. SN Weekly single equation models
for east and west US for three egg sizes displayed
univeral
downward
bias in post sample forecasts.
Miller, S.. 1979, The response
of futures prices to new
market information:
the case of live hogs, Southern Journal
of Agricultural
Economics,
2. 67-70. MK
Milonas, N.T., 1987. The effects of USDA crop announcements on commodity
prices, Journal of Futures Markets. 7.
128
P.G. Alien I International Journal of Forecasting
571-589.
MK For wheat,
corn and the soybean
complex
(beans, oil, meal) results showed that market participants
did
await USDA announcements
to make trading decisions. The
first forecasts of the crop year are more important
than later
ones.
Moffitt.
L.J., R.L. Farnsworth,
L.R. Zavaleta
and M.
Kogan,
1986, Economic
impact of public pest information:
soybean
insect forecasts
in Illinois, American
Journal
of
Agricultural
Economics,
68, 274-279.
PR Proposed
system
for forecasting
pest damage compared
with existing commercial scouting system. Unless the forecast leads to the same
decision
as information
from scouting at least 90% of the
time, scouting will continue to be used. Forecast reliability of
Yl% is worth 2 cents per acre and a perfect forecast is worth
66.7 cents per acre.
Moore,
H., 1917, Forecasting
the Yield and Price of
Cotton (MacMillan.
New York). R SN Regression
of cotton
yield on May rainfall (for May forecast),
on June temperature (for June, July forecasts)
and also on August temperature (for August forecast)
for 1892-1914
data for Georgia.
Alabama
and South Carolina had smaller RMSE than USDA
forecasts
based on condition
indexes made 1 or 2 months
later.
Myer, G.L. and J.F. Yanagida,
1984, Combining
annual
econometric
forecasts
with quarterly
ARIMA
forecasts:
a
heuristic
approach,
Western Journal
of Agricultural
Economics,
9, 200-206.
SN CO ARIMA
model used to get
quarterly
weights of alfalfa price (Petaluma,
CA) that are
combined
with forecasts from econometric
model.
Myers, W.M., 1972, Combining
statistical techniques
with
economic
theory for commodity
forecasting,
American
Economics.
54. 784-789.
ST EV A four
equation
recursive model based on spectral analysis.
Naik, G. and B.L. Dixon.
1986, A Monte-Carlo
comparison of alternative
estimators
of autocorrelated
simultaneous systems using a U.S. pork sector model as the true
structure,
Western
Journal
of Agricultural
Economics,
11,
134-145.
R ST CO For a three equation
monthly
sector
model
with assumed
autocorrelations
of 0 to 0.8, OLS
reduced form estimation
is more accurate within-sample.
but
2SLS and autocorrelation
correction
techniques
better postsample.
Naik, G. and R.M. Leuthold,
1986, A note on qualitative
forecast evaluation,
American
Economics, 68, 721-726.
R TS Describes 4 x 4 contingency
table.
Neilson, J.. 1953, The use of long-run
price forecasts
in
farm planning,
35, 615-672. SN
Simple extrapolation
and elasticity uses.
Nelson.
A.G.,
1980, The case for and components
of a
probabilistic
agricultural
outlook program,
Western Journal
of Agricultural
Economics.
5, 185-193. R OU EVA proposal
covering
the requirements
for a probabilistic
outlook
prosurvey
of user needs,
development
of elicitation
gram.
procedures,
training,
evaluation
and dissemination.
Nelson. G. and T. Spreen, 1978. Monthly steer and heifer
supply,
American
Journal
of Agricultural
Economics,
60,
117-125.
SN Single equation.
price expectation
as trend
extrapolation.
10 (1994) 81p13S
Nelson, K.E., R. Stillman and M. Weimar.

1991, USDA
livestock and poultry forecasts:
process, accuracy
and comparative merit, presented
at the International
Symposium on
Forecasting,
New York, 17 pp. OU CO Presents MAPE of
USDA outlook forecasts made one to three quarters
ahead
for 26 livestock and two crop commodities
(15 quantities,
13
prices). Compares
six methods of making annual forecasts of
beef, pork. chicken quantities
and prices (total six). Simple
average
composite
has lowest RMSE with USDA outlook
best single method and econometric
worst.
Nelson.
R.G. and D.A. Bessler.
1989, Subjective
probabilities and scoring rules: experimental
evidence, American
Economics,
71, 363-369. R PR Tests
the importance
of a proper versus improper scoring rule (see
comment
by Knight et al., 1985). Each subject
made a
succession
of 40 probabilistic
forecasts,
each from the same
series. After about 19 forecasts, those subjects paid according
to the linear (improper)
scoring rule behaved
strategically
and no longer stated their believed subjective
distributions.
Nerlove. M., 1958, The Dynamics of Supply: Estimation
of
Farmers
Response
to Price (Johns Hopkins
Press, Baltimore).
268 pp. R SN Describes
the partial
adjustment
schemes
for price and quantity
that Nerlove
and others
developed
in the 1950s. Chapter 3 (pp. 66-86) is a history of
dynamic supply response analysis in agriculture
from 1917.
Nerlove, M., D.M. Grether and J. Carvalho,
1979, Analysis of Economic
Time Series, A Synthesis (Academic
Press,
New York). SN ST TS Page 260 is referenced
in Brandt and
Bessler (1984) concerning
the cattle market:
multiple time
series models perform
marginally
worse than ordinary
univariate ARIMA.
Newell, S.R., 1953. Planning within agricultural
estimates
for a workable
modernization
program.
Journal
of Farm
Economics.
35, 855-864.
OU Need for improvements
in
speed and accuracy in outlook work. For example, move to
probability
sampling
of cotton farmers intentions
to plant
and cultivated
acres estimates.
Newell, S.R. and S.T. Warrington,
1962. Facts for decisions,
in USDA
Yearbook
of Agriculture
(Government
Printing
Office, Washington,
DC),
pp. 530-535.
R OU
Mainly
about
the process
of determining
and releasing
USDA reports.
Referenced
in Harris (1976) as source of
history of US outlook.
Nyankori,
J.C.O.
and M.D.
Hammig,
1983, Relative
forecasting
performance
of fixed and varying
parameter
demand
models,
presented
at the American
Agricultural
Economics
Association
annual meetings. West Lafayette,
IN,
31 July-3
August
1983. (Abstract
in American
Journal
of
Agricultural
Economics,
65 (1983): 1185.) SN CO Varying
parameter
models outperformed
fixed; and spline function
VP model slightly superior
to Cooley-Prescott.
No single
model consistently
superior
across commodities
in either
levels or turning point predictions.
Okyere,
W.A. and S.R. Johnson,
1987, Variability
in
forecasts
in a nonlinear
model of the U.S. beef sector,
Applied
Economics,
19, 397-406.
ST PR Monte
Carlo
simulation
14 steps ahead of an 18 equation quarterly model.
No forecast performance
measures.
P. G. Allen I I~terrzafio~laiJournal of Forecasting
Oiiveira,
R.A.,
C.W. OConnor
and G.W. Smith, 1979.
Short-run
forecasting
models of beef prices, Western Journal
of Agricultural
Economics,
4,45-5.5.
TS CO ARIMA models
of six cattle cash prices and cattle futures price compared
with naive no change model.
Owen,
C.J., T.L, Sporleder
and D.A.
Bessler,
1991.
Fabricated
cut beef prices as leading indicators
of fed cattle
price, Western Journal of Agricultural
Economics,
6, 86-92.
SN TS CO Compares
univariate
and multivariate
distributed
lag models with random walk for 14 beef cuts. Multivariate
better.
Owen, J,, 1990, Outlook for the North American livestock
sector,
Canadian
Journai
of Agricultural
Economics,
38.
577-589.
OU Recent history,
1980-1990
and description
of
1991 outlook.
Palmer,
C.D. and E.O. Schlozhauer,
1950. Methods of
forecasting
production
of fruit. Agricultural
Economics
Research 2-1, 10-19. R OU Compares
standard
par method
with two other methods. All require an estimate of condition
of the crop by crop reporters
and use various correlations
(or
bivariate
regressions).
Parikh,
A.. 1973, United States, European
and World
demand functions
for coffee, American
55, 490-494.
ST Annual
simultaneous
equation model. Only part is described.
Actual and predicted
1969-1971
import quantities
tabulated.
Parikh. A.. 1974, A modet of the world coffee economy:
1950-1968,
Applied
Economics,
6, 23-43.
ST Combines
annual, quarterly
and monthly data in an 11 or 12 equation
sectoral econometric
model.
Park,
D.W. and W.G. Tomek.
1986, An appraisal
of
composite
forecasting
methods,
Cornell University
Department of Agricultural
Economics
Paper A.E. Research X6-12,
17 pp. TS CO Revised version is Park and Tomek (1988).
Park,
D.W. and W.G. Tomek,
1988, An appraisal
of
composite
forecasting
methods,
North Central
Journal
of
Agricultural
Economics,
10, l-11. SN TS CO For monthly
slaughter steer prices and soybean oil prices, compares six or
five time series and econometric
methods (including naive no
change)
with nine forms of composite
(averages
of twoforecast
or three-forecast).
Simple average composite
best,
not much worse than best single method.
Park, T., 1990, Forecast evaluation
for mult~variate
timeseries models: the U.S. cattle market, Western Journal
of
Agricultural
Economics,
15, 133-143.
R TS CO Compares
five VAR approaches
using a four variable system. Restricted
VAR (Schwartz)
appears most accurate overall.
Park, W.I., P. Garcia and R.M. Leuthold,
1989, Using a
decision
support
framework
to evaluate
forecasts.
North
Central Journal of Agricultural
Economics,
11, 233-242.
R
ST TS CO PR Compares
hog price forecasts
from econometric (two equation),
ARIMA, composite and naive models
when
forecasts
are used to guide produers,
buyers
or
speculators
in trading
futures
contracts.
Risk efficiency
criteria
(FSD, SSD, E-V, risk neutral)
used. ARIMA
is
always in dominant set and for risk neutral decision makers is
always best.
Paulsen,
A. and D. Kaldor, 1961, Methods,
assumptions
10 (1994) 81- 135
129
and results of free market projections

for the livestock and
feed economy,
43, 357-364. LA
Crop yield trends
(1940-1958).
published
elasticities
and
stated assumptions
used for 1959 projection
of 1960-1963
annual values of 18 crop and livestock classes.
Pearson,
D. and J.P., Houck, 1977, Price impacts of SRS
production
reports: corn, soybeans and wheat, Department
of Agricultural
and Applied Economics,
University
of Minnesota. OU.
Peck. A.E., 1975. Hedging and income stability: concepts,
implications
and an example,
American
Journal of Agricultural Economics.
57, 410-419. R PR Calculates and compares
hedging strategies
for egg producers
using regression,
expert
and futures prices as forecasts 1-S months ahead. Generally,
the futures price was the more accurate
forecast.
Hedging
reduced
risk exposure.
with little difference
between total
hedging and partiai hedging based on the different forecasts.
Penson, Jr., J.B. and D.W. Hughes. 1979, Incorporation
of
general economic
outcomes
in economic
projection
models
for agriculture,
Economics,
61, 151-157.
R LA EV Discussion
of multisector
WdCrOeconomic
model emphasizing
agriculture
foltowed by brief
review of first, second and third generation
models (agricultural output not linked to macro variables,
linked through
identities,
linked and account for agricultural
capital accumulation).
Penson, Jr., J.B.. D.W. Hughes and R.F.J. Romain,
1984,
An Overview
of COMGEN:
A Macroeconomic
Model
Emphasizing
Agriculture
Departrnent
of Agricultural
Economics Information
Report
DIR 84-l. DP-12, Texas A&M
University.
College Station. TX. R LA.
Pieri, R.G.,
K.D. Meilke and T.G. MacAulay,
1977,
North
American-Japanese
pork trade:
an application
of
quadratic
programming,
Canadian
Journal
of Agricultural
Economics,
25. 61-79.
ST Quarterly
recursive
five region
quadratic
programming
model of the pork sector, The only
thoroughly
validated
spatial equilibrium
model found in the
literature
(Thompson
and Abbott,
1982).
Prescott, D.M. and T. Stengos, 1987, Bootstrapping
conftdcnce intervals:
an application
to forecasting
the supply of
pork. American
Economics,
9, 266273. R TS Demonstrates
bootstrapping
for both fixed and
random
explanatory
variables
at four forecast
dates, but
conducts no tests. Forecast distributions
have positive skew.
Price, J.M., R. Seeley and C.K. Tucker,
1992, The Food
and Agricultural
Policy Simulator,
Estimation
of Farm Production
Expenses
USDA-ERS
Technical
Bulletin Number
1803, 32 pp. LA Annual 15 equation
submodel
for 15 farm
expense categories
estimated
by OLS or (where necessary)
by maximum likelihood to correct for first order autocorrelation. Within-sample
validation
using mean absolute relative
error (MAPEIlOO),
Theils Vz (none over one) and relative
turning point error. Re-estimation
of same specification
after
dropping
last year of data allows limited
post-sample
testing.
Quance,
L. and L. Tweeten.
1972. Excess capacity and
adjustn~ent
potential
in U.S. agriculture,
Agricultural
Economics Research,
24, 57-66. R LA Aggregate
annual supply
130
P.G. Allen I International Journal
and demand equation first generation

model. Elasticities and
adjustment
rates taken from various sources. Their sensitivity
tested. Projections
to 1980 under three policy assumptions.
Quiroga.
R., K. Konyar
and I. McCormick,
1993, The
U.S. Agricultural
Resources
Model: Data Construction
and
Updating
Procedures
USDA-ERS
Staff Report AGES 9304.
The model is described
in Konyar et al. (1993).
Randall,
C.K. and A.S. Rojko.
1961, Methods.
assumptions and results of the price and income projections
of the
United States Department
of Agriculture,
Journal of Farm
Economics.
43, 34X-356. OU EV Describes projections
not forecasts.
Rausser,
G.C.,
19X2, New conceptual
developments
and
measurements
for modeling
the U.S. agricultural
sector. in
Gordon C. Rausscr (editor). New Directions
in Econometric
Modeling
and Forecasting
in U.S. Agriculture
(North-Holland. New York), Chapter 1. pp. 1-14. R ST EVA summary:
history 1920- 1980; issues: model construction
strategy (depends on purpose).
aggregation
(over commodities.
space
and time), estimation
methods, policy impact analysis (little).
Rausser.
G.C. and T.F. Cargill.
lY70. The existence
of
broiler
cycles: a spectral
analysis.
American
Journal
of
Agricultural
Economics,
52, 109-121. R TS Results do not
support existence of cycles. No forecasting.
Rausser.
G.C.
and C. Carter.
1983. Futures
market
efficiency in the soybean complex. Review of Economics and
Statistics.
65. 469-478.
MK CO Efficiency
assessed
by
comparing
post-sample
forecasts
of naive,
ARIMA
and
transfer function models with futures prices for soybeans, oil
and meal. Also by MSE decomposition.
Ray. D.E. and E.O.
Heady,
lY72. Government
farm
programs
and commodity
interaction:
a simulation
analysis.
American
Journal
of Agricultural
Economics.
54. 5788590.
LA Recursive
annual submodels
for six commodity
groups.
Limited links among them.
Ray, D.E. and T.F. Moriak.
1976. POLYSIM:
A national
agricultural
policy simulator.
Agricultural
Economics
Research, 28, 14-21. R LA An accounting-type
model that uses
USDA-ERS
5-year projections
of supplies. prices and uses of
commodities,
and commodity
supply and demand elasticities
to examine
the impact of different
policies.
Developed
at
Oklahoma
State University
in 1970-1072.
Rayner.
A.J. and R.J. Young, 1980, Information,
hierarchical model structures
and forecasting:
a case study of dairy
cows in England and Wales. European
Review of Agricultural Economics,
7, 289-313.
TS CO Compares
two univariate
ARIMA.
two transfer
function
type and econometric
(two
single
equation)
models.
Within-sample
testing
using
forecasted
exogenous
variables if actual values would not be
known at time of forecast.
Reveil, B.J.. 1974. Short-term
forecasts of U.K. monthly
fat cattle
slaughterings,
beef and veal production
and
producer
returns for fat cattle: an application
of Box-Jenkins
forecasting.
in G.R. Allen (editor), The outlook for beef in
the United
Kingdom
(School
of Agriculture.
Aberdeen,
UK). TS
Revell, B.J., 1981, Box-Jenkins
forecasting
models: com-
of Forecasting
10 (1994)
SI-135
ment, Review of Marketing

and Agricultural
Economics,
49,
127-130.
TS CO For both Bourke
(1979) and Gellatly
(lY79). a random walk would be the best ARIMA model.
Rister, M.E., J.R. Skees and T.R. Black, 1984, Evaluating
the use of outlook
information
in grain sorghum
storage
decisions,
Southern
Economics,
16.
151-158.
R OU PR Risk neutral decision maker has same
storage
and selling strategy
when outlook
information
is
available
as when it is not. Moderately
risk averse decision
makers use outlook information
and would be willing to pay
for it.
Rojko.
A.S. and M.W. Schwartz.
1976. Modeling
the
World grain-oilseeds-livestock
economy to assess world food
prospects,
Agricultural
Economics
Research,
28, 80-98. LA
PG Mathematical
programming
model of 11 commodities
and
27 regions. based on work by Takayama
and Judge (Econometrica, 32 (1064): 510-524),
and the world grain model of
Rojko et al. (World demand prospects for grain in 1980 with
emphasis on trade by the less developed countries Econ. Res.
Serv., U.S. Dept. Agr. For. Agr. Econ. Rpt 75, December
1971).
Roop. J.M. and R.H. Zeitner,
1977. Agricultural
activity
and tne general economy: some macroeconomic
experiments.
American
Economics.
9, 117-125. R
LA A nine equation model to link with Wharton EFA model
(second generation).
Roy, S.K. and W.L. Henson.
lY71. Econometric
mod&
for predicting
weekly and quarterly
egg prices,
in G.B.
Rogers
and L.A. Voss (editors).
Readings
in Egg Pricing
University
of Missouri-Columbia,
MP 240, pp. 16YYl87. ST
Roy,
S.K. and M.E.
Ireland.
1975, An econometric
analysis of the sorghum
market,
American
Journal
of Agricultural Economics,
57. 5133516. ST A five equation annual
model. Compares
within-sample
prediction
by reduced forms
from 2SLS and 3SLS.
Roy, S.K. and P.N. Johnson,
1974, Econometric
Models of
Cash and Futures Prices of Shell Eggs USDA-ERS
Technical
Bulletin Number
1502. 32 pp. ST Quarterly
seven equation
and monthly six equation
models of the US egg sector.
Roy. S., 1971, Prediction
of shell egg price: a short run
model. Southern Journal of Agricultural
Economics,
3, 175179. ST A four equation
quarterly
model of the US egg
sector.
Runklc,
D.E.,
19Y1. Are farrowing
intentions
rational?,
American
Journal
of Agricultural
Economics,
73, 594-600.
MK Not rational in the sense of being biased and inefficient.
Runklc. D.E., lYY2, Do futures markets react efficiently to
predictable
error in government
announcements?,
Journal of
Futures Markets.
12. 635-643.
MK Live hog futures prices
arc efficient
with respect
to farrowing
announcements
in
USDA Hogs and Pigs report. Prices account for predictable
errors in farrowing
intentions
numbers.
Russell, S.W., 1929, Methods of forecasting
hog production
and marketing,
Proceedings
of the American
Statistical
24, 2255233.
OU Hog-corn
ratio, farrowing
Association,
intention and pig crop survey values charted against time and
judgmentally
combined to give final outlook on hog slaughter.
P.G. Allen
I Intermtionul
Journal of Forecasting
Ryland.
G.J., 197.5, Forecasting
crop quality, Review of
Marketing
and Agricultural
Economics,
43, 88-102.
TS
Quadratic
spline and ARIMA models applied to weekly data
on sugar content of cane sugar.
Salathe,
L.E., J.M. Price and K.E. Gadson,
1982, The
food and agricultural
policy simulator,
Agricultural
Economics Research,
34, 1-15. R LA Review of USDA-ERS
modelling from 1970. Discussion of FAPSIM, a 360 equation
model of nine crop and 12 livestock products.
Salathe,
1982, The
policy simulator:
the dairy sector
submodel.
Agricultural
Economics
Research,
34, I-14. ST
Annual 48 equation
econometric
model.
Salathe,
1983a. The
policy simulator:
the poultry and eggsector submodel.
Agricultural
Economics
Research,
35-1,
23-34. ST Annual 30 equation econometric
model.
Salathe,
1983b, The
response
of the hog industry
to a reduction
in corn production:
an application
of the food and agricultural
policy
simulator,
North Central Journal of Agricultural
Economics,
5, 1399146. ST Annual
15 equation
pork sector submodel
validated
within-sample.
Sapsford,
D. and Y. Varoufakis,
1987, An ARIMA analysis
of tea prices, Journal
of Agricultural
Economics.
38, 329334. TS CO Derives ARIMA
model from sectoral econometric model. Compares
naive, AR(2) and ARIMA
forecasts of monthly tea prices. ARIMA most accurate.
Sapsford,
D. and Y. Varoufakis,
1990. Forecasting
coffee
prices: ARIMA
vs. econometric
approaches,
Rivista Internazionale
di Scienze Economiche
e Commerciali,
37, 551563. SN TS CO Monthly econometric
model with all lagged
explanatory
variables more accurate than seasonal ARIMA
for 36 (one step ahead?) ex ante forecasts.
Sarle, CF.,
1925, The forecasting
of the price of hogs,
American
Economic
Review
15 Number
3 Supplement
Number 2, l-22. R SN The essay awarded the Babson prize
by the AEA. Regression
to predict monthly change in hog
price (seasonally
adjusted)
as a function of detrended
lagged
prices of industrial
stocks, corn (annual average) and hogs.
Predicts hog prices (equivalent to three steps ahead forecasts)
both within and post-sample.
Schaller, W.N. and G.W. Dean, 1965, Predicting
Regional
Crop Production:
An Application
of Recursive Programrning
USDA-ERS
Technical Bulletin Number 1329, 95 pp. LA PG
Annual linear program with flexibility constraints
for cotton
and 11 alternative
crops in Fresno, CA.
Schluter,
G., 1974, Combining
input-output
and regression analysis in projection
models: an application
to agriculture.
Agricultural
Economics
Research,
26, 95-105.
LA
Gross farm product predicted from gnp and output per dollar
of final demand for each of ten agricultural
sectors, based on
1963 US I-O table. Prediction
error regressed on ratio of gfp
(gross farm product) and gnp implicit price deflators, ratio of
farm output to input and time trend, which improved
the
post-sample
forecast.
Schmitz,
A. and D.G. Watts,
1970, Forecasting
wheat
10 (i994)
81-135
131
yield: an application
of parametric
time series modeling.
American
Economics,
52, 247-254. R
TS CO Illustrates
Box-Jenkins
and exponential
smoothing
approaches
using annual data.
Schroeder,
T., J.B. Blair and J. Mintert, 1990, Abnormal
returns in livestock futures prices around USDA inventory
report releases, North Central Journal of Agricultural
Economics, 12.293-304.
R MK EV Reviews previous literature on
impacts
of outlook
information
on prices.
Finds
few
significant
abnormal
returns
in futures
markets.
Outlook
reports
do provide
new information.
but less information
available for hogs than for cattle.
Selzer, R.E. and R.J. Eggert, 1949, Accuracy of livestock
price forecasts
at Kansas State College,
Journal
of Farm
Economics,
31, 342-345.
OU Developed
scoring system to
rate qualitative
forecasts.
Monthly
forecasts
of hog prices
192551940 were 64% accurate and cattle prices were 62.7%
accurate.
Cannot be compared
with standard
accuracy measures.
Shafer, C.E., 1989, Price and vafue effects of pecan crop
forecast
1971-87,
Southern
Journal
of Agricultural
Economics, 21, 97-103. OU CO Pecan prices are more accurately
explained
by early season crop forecasts than by post-season
final estimates,
according
to the accuracy of within-sample
predictions
of five different
specifications
of average farm
price.
Shapiro,
H.T., 1973, Is verification
possible? The evaluation of large econometric
models,
American
Journal
of
Agricultural
Economics.
55, 250~-258. R LA EV One can
corroborate
but not verify theory.
Lists goodness
of tit
measures.
Sharptes,
J.A. and W.N. Schatler,
1968, Predicting
shortrun aggregate
adjustment
to policy alternatives,
American
Economics,
50, 1523-1536.
LA Annual recursive programming
of crop response in five regions
of the US each divided
into 8-12 subregions.
Excludes
livestock,
labor constraints
and capital constraints.
Includes
irrigation
constraints,
farm program
allotments
and diversions. Flexibility
constraints
most critical determinants
of
solutions.
Makes comparison
of actual and projected
acres
for six crops using actual 1968 farm program provisions.
Shideed, K.H. and F.C. White, 1989, Alternative
forms of
price expectation
in supply
analysis
for U.S. corn and
soybean
acreages,
Western
Journal
of Agricultural
Economics,
14. 281-292.
SN CO Single equation
estimation
comparing
six different
forms of expected price in acreage
response functions.
Shonkwiler,
J.S. and T.H.
Spreen,
1982, A dynamic
regression
model of the U.S. hog market, Canadian Journal
of AgriculturaI
Economics,
30, 37-48.
R TS Illustrates
transfer
function estimation
of hog slaughter
as function of
the hog-corn price ratio.
Skinner,
R. and L.A. Meyer,
1991, Cotton production
estimates:
a historical review, Cotton and Wool Situation and
Outlook Report USDA-ERS
CWS-65, pp. 27-44. OU Calculates average forecast (as percentage
of final value) and 95%
confidence
interval for planted acres, harvested
acres, yield
132
and production
of upland and American
Pima cotton for
different months of the crop year (AugusttJuly)
from 19651990. Tabulated
forecast
and final estimate
values permit
calculation
of standard
forecast accuracy statistics. No comparisons with other forecast methods.
Smallwood,
D.M. and J.R. Blalock,
1986, Forecasting
performance
of models using the Box-Cox
transformation.
Agricultural
Economics
Research,
38, 14-24.
SN Monte
Carlo analysis of known three variable
Box-Cox
equation
with different
values of h parameter
and sample sizes of 30
and 60. For A greater than zero, forecast RMSE is smaller in
the bigger sample. while this is not true with A less than zero.
Smith.
B.B.,
1925, Forecasting
the acreage
of cotton,
Journal
of the American
Statistical
Association.
20, 31-47.
SN First differences
of acreage regressed on first differences
of average spot prices for 5 separate months (known at time
of forecast)
and time trend using 1907-1921 data. Probable
error (within-sample
SO% confidence
interval) was 2%.
Smith, B.B., 1927, Forecasting
the volume and value of
the cotton crop, Journal of the American
Statistical Association. 22, 442-459.
R SN Uses correlation
analysis on eight
variables
(including
time and production)
to forecast cotton
price.
Smyth. D.. 1973. Effect of public price forecasts on market
price variation:
a stochastic
cobweb
example,
American
Economics,
55, 83-88. PR Variance
shown to be theoretically
always less with a forecast
than
without.
Soliman,
M.A.,
1971, Econometric
model of the turkey
industry in the United States, Canadian
19, 47-60. R ST CO A five equation annual
sector model estimated
by OLS, ZSLS, 3SLS and LISE. No
method emerged as clearly the most accurate forecaster.
Spilka, Jr., W., 1983, An overview of the USDA crop and
livestock information
system, Journal of Futures Markets, 3,
167-176.
OU Lists and discusses
the USDA
reports
of
various
crop and livestock
inventories
and production
in
process
that act as leading indicators
of agricultural
production and prices.
Spreen, T.H. and C.A. Arnade,
1984, Use of forecasts in
decisionmaking:
the case of stocker cattle in Florida, Southern Journal
of Agricultural
Economics,
16, 145-150.
R SN
TS CO PR Compares
five methods
(including
naive no
change) of forecasting
second quarter
feeder steer price as
guide to producer
of fourth quarter calves when considering
whether
or not to raise them to feeders.
Single equation
regression
most accurate.
but exponential
smoothing
most
useful for decision making.
Spreen,
T.H.,
R.E.
Mayer,
J.R.
Simpson
and J.T.
McClave,
1979. Forecasting
monthly
slaughter
cow prices
with a subset autoregression
model,
Southern
Journal
of
Agricultural
Economics,
11, 127-131. TS ARIMA model of
monthly Florida cow prices, all grades.
Spriggs, J., 1978, A note on confidence
intervals for corn
price and utilization
forecasts,
Agricultural
Economics
Research, 30, 32-33. R PR Shows that the standard
errors of
forecast from Goldberger
method are about ten times larger
than those from the approximate

method of Teigen and Bell
(1978).
Spriggs, J., 1981, Forecasts of Indiana monthly farm prices
using univariate
Box-Jenkins
analysis
and corn futures
prices, North Central Journal of Agricultural
Economics,
3.
81-87.
TS CO Compares
ARIMA,
futures price and four
composites.
Equal
weights
combinina
most accurate
for
composite,
but except for one step ahead. futures price is
best.
Stillman,
R.P.. 1985. A quarterly
model of the livestock
industry
USDA-ERS
Technical
Bulletin Number
1711, 40
pp. R ST A 29 equation
(eight annual)
cattle, hog and
chicken model.
Stillman, R.P.. 1987, A quarterly
forecasting
model of the
U.S. egg sector USDA-ERS
Technical
Bulletin
Number
1729, 23 pp. ST A ten equation model validated by dynamic
simulation
both within and post-sample.
A part of the model
described
by Westcott and Hull (1985).
Stonehouse,
D.P.. D.H. Harrington
and R.K. Sahi. 1978,
An econometric
forecasting
and policy analysis model of the
Canadian
dairy industry, in Agriculture
Canada, Commodity
Forecasting
Models for Canadian
Agriculture,
Vol. 1. coordinated by Z.A. Hassan and H.B. Huff, Ottawa.
Canada.
publication
no. 7812, pp. 77-110.
ST Basic 42 equation
annual model, with some identities functioning
as operating
rules in forecasting/projecting,
plus other accounting
equations to calculate
producer
revenues,
government
support
costs, producer
and consumer
surpluses,
totalling 72 expressions in all.
Subotnik,
A. and J.P. Houck,
1982, A quarterly
econometric model for corn: a simultaneous
approach
to cash and
futures markets,
in G.C. Rausser (editor), New Directions
in
Econometric
Modeling
and Forecasting
in U.S. Agriculture
(North-Holland,
New York), Chapter 8, pp. 225-255. ST A
seven
equation
plus annual
production
equation
model
validated
within-sample
by static and dynamic
simulation.
Farm price is a function of futures price and quarterly
stock
carryover.
Sumner,
D.A. and R.A.E.
Mueller,
1989, Are harvest
forecasts
news?,
American
Journal
of Agricultural
Economics, 71. 1-8. MK The relative change of corn and soybean
futures
prices on the day of a USDA
announcement
is
significantly
different
from the change 5 days before and
after. August,
September
and October
announcements
appear to have a stronger impact than July and November.
Suds,
F. and G. Gajewski,
1990, How accurate
are
USDAs forecasts?.
Agricultural
Outlook,
USDA-ERS,
AO164, pp. 2. 4-5. R OU Compares
average forecasting
error 41
1981/1982-198911990
by month of US and foreign production and exports for wheat, coarse grains and soybeans.
Swamy, P.A.V.B., R.K. Conway and M.R. LeBlanc. 1989,
The stochastic
coefficients
approach
to econometric
modeling, part III: estimation,
stability
testing and prediction,
Journal
of Agricultural
Economics
Research,
41, 4420. SN
CO Table 1 contains 20 out-of-sample
comparisons
of root
mean square
errors
from fixed coefficient
and stochastic
coefficient
models,
including
three livestock
price models
P.G. Allen / in~ern~i~on~l Journal of Forecasting 10 (1994) N-135
from Conway, Hallahan, Stillman and Prentice (1987). The

pork model of Conway et al. is one of the two where the
iixed coefficient model is better.
Taylor, C.R., 1990, U.S. Agricultural Sector Models:
Description and Selected Policy Applications (lowa State
University Press, Ames, IA). LA EV Compares equation
estimates and descriptions of several large scale econometric
mode&.
Taylor, P.D. and W.G. Tomek, 1984, Forecasting the basis
for corn in western New York, Journal of the Northeastern
Agricultural Economics Council, 13, 97-102. SN Basis (futures price minus cash price) is predicted from an annual
single equation. Auxiliary equations needed to predict values
of explanatory variables show large forecast errors. These
lead to large forecast errors in basis, as shown by a single
within-sample prediction.
Tegene, A., 1991, Results of a price forecasting competition: comment, American Journal of Agricuiturai Economics, 73, 1274-1276. TS Corrects Henriksson-Merton
test
confidence interval used in Dorfman and Mclntosh (1990).
Teigen, L.D. and T.M. Bell, 1978a. Confidence intervals
for corn price and utilization forecasts, Agricultural Economics Research, 30, 23-29. R PR Forecast variance is
approximated by standard error of estimate squared (often
obtained judgmental~y) times a correction factor (n + k)in,
where k is the average number of parameters per equation
and n is the average sample size of each estimated equation.
See comment by Spriggs (1978) and reply).
Teigen, L.D. and T.M. Bell, 1978b, Confidence intervals
for corn price and utilization forecasts: a reply, Agricultural
Economics Research, 30, 34-35. R PR Compares USDA
forecast RMSE with standard error from Goldberger method
and authors approximation. Their approximation is closer to
USDA values than Goldberger is (and smaller). No comparative tests against actual variability.
Thompson, R.L. and P.C. Abbott, 1982, New developments in agricultural trade analysis and forecasting, in
Gordon C. Rausser (editor), New Directions in Econometric
Modeling and Forecasting in U.S. Agriculture (North-Hoar
land, New York), Chapter 12, pp, 345-387. R LA Review
with over 100 references. Notes (p. 371) Of the few
modeling exercises that did list forecasting as an objective.
almost none provide any forecasting performance measures
out of the range of data used to estimate the model.
Thomson, J.M., 1974, Analysis of the accuracy of USDA
hog farrowings statistics, American Journal of Agricultural
Economics, 56, 1213-1217. OU Compares accuracy 42 (using
MAPE) and improvements (using Theils R statistic) of first
and second revisions (in quarters two and three) to original
estimates (in quarter one) for non-probability mail (rural
carrier, September
1959-March 1963), probability mail
(March 1963-March 1970) and multiple frame (list frame and
probability area frame March 1~0-March
1973) surveys,
Non-probability was more accurate, though perhaps it refers
to a period of limited variability.
Throsby, C.D., 1974, A quarterly econometric model of
the Australian beef industry, Economic Record, 50, 199-217.
I33
ST A ten equation model with beef supply, demand, price

and exports and 12 months of forecasts.
Timm. T.R., 1966, Proposals for improvement of the
agricultural outlook program of the United States. Journal of
Farm Economics, 48. 1179-1184. R OU EV Makes nine
proposals including making probabilistic outlook statements
and projecting probable actions of government programs.
Toliey, H.R., X931, The history and objectives of outlook
work, Journal of Farm Economics, 13, 523-534. OU In 1929,
40 states produced outlook reports. Reports and meetings
viewed by the Extension Service as wedges (foot in the
door) to get farmers to think about economic issues in
making their plans. Referenced in Kunze (1990).
Tomek, W.G. and R.W. Gray, 1970, Temporal relationships among prices on commodity futures markets: their
allocative and stabilizing roles, American Journal of Agricultural Economics, 52. 372-380. MK Compares futures price
behavior for continuously storabte commodities (corn, soybeans) where inventory hedging is important and discontinuously storable commodities (Maine potatoes) where forward
pricing is important. Perhaps surprisingly, corn and soybean
futures had best price forecasting ability and potato futures
best price stabilizing ability.
Tomek, W.G. and R.J. Myers, 1993, Empirical analysis of
agricultural commodity prices: a viewpoint, Review of Agricultural Economics, 15, 181-202. EV A critique of the
methods of estimating and forecasting commodity prices.
Suggests that economists preoccupation with highly detailed
models to explain markets should be replaced by efforts to
forecast and anaiyse policy using robust models.
Trapp, 3.N.. 1981, Forecasting short-run fed beef supplies
with estimated data, American Journal of Agricultural Economics, 63, 457-465. R OU SN CO USDA intentions survey
more accurate than three econometric models. But with
parameter updating, an econometric model that includes
growth rate, starting and slaughter weight indexes is best.
Trelogan, H.C., 1963, The changing world for agricultural
statistics, Journal of Farm Economics, 45, 1500-1506. R OU
Describes mail surveys and probability sampling.
U.S. Congress, House Committee on Agriculture, 1952,
Crop Estimating and Reporting Service of the Depa~ment of
Agriculture Report and Recommendations
of a Special
Subcommittee,
U.S. 82d Congress, 2nd Sess. Committee
Printing (U.S. Government Printing Office, Washington,
DC), 75 pp. R OU Source of the $125 million cost to fanners
of overestimation of the US cotton crop.
U.S. Department of Agriculture, Statistical Reporting
Service, 1969, The Story of Agricultural Estimates fvfisceifaneous Publication Number 1088,137 pp. R OU History of the
development
of crop and livestock data collection and
analysis at the USDA.
U.S. Department of Agriculture, Statistical Reporting
Service, 1976, Which way profits after crop reports, Agricultural Situation. OU Price change in spot corn and wheat
market following monthly Crop pruductinn and quarterly
Grain Stocks reports 1 day and 1 week after release of
report. Referenced in Hoffman (1980).
134
U.S. Department
of Agriculture,
Statistical
Reporting
Service,
1977. Hog reports and market prices. Agricultural
Situation.
OU Over a 4 year period, weekly average price
after Hog and Pigs released was about equally higher and
lower than weekly average price in week when report was
released.
Referenced
in Hoffman (1980).
U.S.
Department
of Agriculture,
Statistical
Reporting
Service.
1983, Scope and Methods of the Statistical Reporting Service Miscellaneous
Publication
Number
1308, July
1975, revised
September
19X3, IS6 pp. R OU Detailed
description
of current survey and analysis methods by crop
and livestock
commodity.
Timing of the various
kinds of
reports also detailed.
U.S.
Department
of Agriculture,
Economic
Research
Service/ National Agncultural
Statistics Service, 1989, Major
Statistical
Series of the U.S. Department
of Agriculture.
Volume 7. Crop and Livestock Estimates
Agriculture
Handbook Number 671, 28 pp. R OU Summary of the survey and
analysis methods described in USDA. 1983. Detailed tabulation of timing and nature (estimates.
forecasts,
intentions)
of
the various reports.
U.S. General
Accounting
Office.
1988. USDAs
Commodity Program:
The Accuracy
of Budget Forecasts
GAO/
PEMD-88-8,
128 pp. R OU CO Reports
error of USDA
forecasts
of aggregate
farm program
budget requirements,
197221986.
Compares
USDA and naive forecast errors for
budget
requirements
for corn, wheat and dairy programs.
1981-lY86.
Aggregate
naive error always less over the 5 year
period. Compares
USDA. private analysts and naive forecast
errors for various marketing
variables
for corn and wheat.
USDA/private
are similar and usually better than naive.
U.S. General Accounting
Office, 1991a, Short-Term
Forecasting: Accuracy
of USDAs Meat Forecasts
and Estimates
GAOIPEMD-91-16.
76 pp. R OU CO Calculates
bias error
and total error
(MAPE)
of annual
USDA
forecasts
of
production
and price of beef, hogs and broilers. Total errors
averaged
less than 6% with small underestimates
of production
and broiler price and small overestimates
for beef
and hog prices in the 1983-1989 period. Errors were similar
to those made by private analysts.
U.S. General Accounting
Office, 19Ylb, USDA Commodity Forecasts:
Inaccuracies
May Lead to Underestimates
of
Budget Outlays
GAOIPEMD-91-24.
X8 pp. OU Examines
USDA
forecasts
1-5 years ahead for production,
price.
exports and stocks of four major crops and dairy products.
During 10X1-1988. all prices and most other variables were
overestimated
(negative
bias). Suggests
improvements
to
USDAs forecasting
process.
Vere. D.J. and G.R. Griffith.
1990. Comparative
forecast
accuracy
in the New South Wales prime
lamb market,
Australian
Jourral of Agricultural
Economics,
34. 103-117. R
SN TS CO Compares
single equation,
system, naive, expert,
ARIMA,
combining.
Von Massow,
M., A. Weersink
and C.G. Turvey.
1992,
Dynamics
of structural
change in the Ontario hog industry,
Canadian
Economics,
40. 933107. PR
Both stationary
and non-stationary
transition
probability
IO (1994) X1-13.5
models predict about 60%~ less hog producers

in Ontario by
the year 2000. Major impact from combination
of technological advance and improvements
in human capital.
Vroomen,
H., 1991. Forecasting
retail fertilizer prices: a
combined
time series regression
analysis approach
USDAERS Technical
Bulletin Number
1789, 14 pp. SN Monthly
wholesale
price and transportation
cost used as explanatory
variables
in regression
equation
for retail price of each
fertilizer
constituent
(anhydrous
ammonia.
phosphoric
acid
and potassium
chloride).
Regression
equations
for retail
prices of 14 fertilizer products
based on retail prices of the
three
main
constituents.
Six steps
ahead
forecasts
of
wholesale
prices and transport
costs from ARIMA
models
and autoregression
respectively.
Vukina, T.. 1992, Hedging with forecasting:
a state-space
approach
to modeling
vector-valued
time series, Journal of
Futures Markets.
12, 307-327.
TS Model that forecasts both
cash and futures prices (of daily soybean meal prices) slightly
more accurate than model of futures price alone or cash price
plus basis. Using any model as signal is more profitable than
either routine hedge or no hedge over a 3 month period, with
practically
no difference
among models.
Walker,
D., 1985, Critique of current outlook practices,
Canadian
Economics,
32. 70-76. OU
EV Clients need not served by a policy that separates market
news from market outlook.
Wallace.
H.A.,
1923. What is in the corn judges mind?
Agronomy
Journal.
15, 300-304.
OU Correlation
analysis
used to measure weights assigned to six observable
characteristics of ears of corn by experienced
judges. Same nethods
used to relate yield of same ears of corn to the characteristics. Length of ear most important
to the judges, but little
related
to yield. An early (probably
the first) effort to
construct
an expert system.
Wallace, J.R., 1953, Estimating
the United States cotton
crop, Agricultural
Economics
Research.
5. 28-33. R OU EV
Comments
on the problems
with crop forecasting
raised by
the Congressional
inquiry.
Walters,
F., 1965. Predicting
the beef cattle inventory,
Agricultural
Economics
Research,
17, 10-18. SN Shows use
of annual single equation
models.
1970. A spectral
analysis
of world cocoa
Weiss, J.S..
prices.
American
Journal
of Agricultural
Economics,
52,
122-126. R TS Annual and monthly.
No forecast.
Wells, G.J.,
1980, Forecasting
South Carolina
tomato
prices prior to planting.
Southern
Journal
of Agricultural
Economics.
12, 109-112. SN Annual single equation,
based
on data available in February.
Westcott.
P.C.. 1986. Aggregate
indicators in the quarterly
agricultural
forecasting
model: retail food prices USDA-ERS
Staff Report
AGES 860916, 32 pp. SN CPIs for 21 food
groups estimated
by OLS and 3SLS.
Westcott.
P.C., 1981. Monthly food price forecasts,
Agricultural
Economics
Research.
33-3. 27-30.
SN For CPI
food at home/away
from home indexes.
Westcott,
P.C., 1986. A quarterly
model of the U.S. dairy
sector
and some of its policy implications
USDA-ERS
Technical
Bulletin Number 1717, 34 pp. ST A nine equation
model tested by dynamic simulation
(using actual exogenous
variables)
one to four steps ahead both within-sample
and
post-sample.
Milk stocks, imports,
support price and price
deductions
are all contemporaneous
exogenous
variables.
Westcott. P.C. and D.B. Hull, 1985, A Quarterly
Forecasting Model for U.S. Agriculture
USDA-ERS
Technical
Bulletin Number 1700. R LA A 160 equation model of the corn.
wheat, soybean complex, beef, hog and poultry sectors (the
livestock sectors based on Stillman (1985)). Within-sample
and post-sample
dynamic simulations
one to four steps ahead
using actual values of exogenous
variables.
Wcstcott,
P.C.. D.B. Hull and R.C. Green,
1985, Relationships between quarterly
corn prices and stocks. Agricultural Economics
Research
37-1, 1-7. SN CO Compares
forecast performance
of two models of corn price.
White, B., 1987, Forecasting
milk output in England and
Wales. Journal of Agricultural
Economics,
38. 223-234.
TS
Monthly ARIMA model fitted and used with discrete adjustment (filter) to forecast post-quota
milk production.
White, B.J.. 1972, Supply projections
for the Australian
beef industry,
Review of Marketing
and Agricultural
Economics, 40. 3-14. ST Annual
forecasts
based on assumed
inventory
changes.
Williams. W.F., 3953, An empirical study of price expectations and production
plans, Journal of Farm Economics.
35,
X5-370.
OU Survey of 80 milk producers
in a small area of
Illinois. Most base their expected price on recent past actual
price. They expect prices of all outputs and inputs to move
together.
Yeh. C.J.. 1976, Prices, farm outputs, and income projections under alternative
assumed
demand
and supply conditions,
American
Journal
of Agricultural
Economics,
58,
703-711.
R LA Aggregate
annual
three equation
(plus
accounting
equations)
first generation
model.
Parameters
(elasticities)
from other studies.
Projections
to 1985 of 12
scenarios of demand,
supply and inflation rates.
Yu, F.-C. and P. Qrazem,
1990, The rationality
and value
of USDA crop forecasts, presented at the American Agricultural Economics
Association
annual meetings,
Vancouver,
Canada.
(Abstract
in: American
Journal
of Agricultural
Economics.
72 (December
1990): 1353.) MK Several forecasts of planted
acreage and harvest size of barley, corn,
oats, soybeans
and spring wheat are found to be inefficient
and/or
biased. Ear& forecasts more valuable than later for
market supply information.
Zapata.
H.O.,
1987, Bayesian
and Nonbayesian
Techniques for Forecasting
Monthly
Cattle Prices, unpublished
Ph.D. dissertation,
University of Illinois. TS
Zapata.
H.O. and P. Garcia,
1990, Price forecasting
with
time-series methods and nonstationary
data: an application
to
monthly U.S. cattle prices, Western Journal of Agricultural
Economics,
15. 123-132. TS CO Compares
ARIMA,
VAR
(raw and differenced
data), error correction
(~ointegrati~~n)
model and asymmetric
Bayesian VAR (raw and differenced
data) for forecasting
monthly slaughter
steer prices. Differenced VAR was most accurate
for one to six steps ahead
forecasts.
Zepp, G. and R.H. McAlexander,
1969, Predicting
aggregate milk production:
an empirical study, American Journal
of Agricultural
Economics,
51. 642-649.
SN CO PC Compares LP, RP and regression.
Regression
best.
Biography:
Economics
has a Ph.D.
California.
production
P. Geoffrey
ALLEN is a Professor of Resource
at the University of Massachusetts.
Amherst.
iie
in agricultural
economics from the University of
Davis. His research
interests
are in analysing
decisions under uncertainty.

Allen Economic Forecasting

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International

University of Massachusetts, Amherst,

fax: (413) 545-5853

B.V. All rights

omits research (from about 1925-1950)

i International Journal of Forecasting

the entire period,

The aim of the review is to provide a summary

Articles on the methods or results of forecasting were extracted from an exhaustive

I International Journal of Forecasting 10 (1994) 81-135

tables that list the source studies for each table

The nature of agricultural

P.G. Allen I International Journal of Forecasting 10 (1994) 81-135

Characteristics of agricultural production

P.G. Allen I International Journal of Forecasting 10 (1994) 81-135

P.G. Allen I International Journal of Forecasting 10 (1994) 81-13s

casts. The ultimate

In 1862, the editor of the American Agriculturalist sought and published

P.G. Allen I International Journal of Forecasting 10 (1994) 81-135

P.G. Allen I International Journal of Forecasting

yield forecasts in 1961, for wheat in 1962 and for

P.G. Allen I International Journal of Forecasting

years ago [Bottum (1966), Daly (1966)] may no

ate to be of value; (2) if outlook reports were

P.G. Allen I International Journal of Forecasting 10 (1994) 81-135

range of methods. As Armstrong

Accuracy better than naive about 70% of time

Turning point better than naive about 85% of time

Accuracy better than naive or trend about 70% of time

Turning point better than naive. trend or random

about 70% of time

Including producer intentions as explanatory

cr = crops. Iv = livestock products.

4. Single equation econometric

InternationalJournal of Forecasting 10 (1994) 81-135

prices). These models specified lagged explanatory variables

4.2. Crop and livestock

Because most crops have an annual growing

I International Journal of Forecasting

for the commodity,

II) (1994) 81-13

Naive price expectations

P.G. Allen I International Journal of Forecasting 10 (1994) 81-135

No. of series which

Curr. expl. var.

12 crop studies, 38 livestock studies, 1 both.

context. In an article that demonstrated

No. of series which

Curr. expl. var.

I International Journal of Forecasting

the storage cost, annual crop price forecasts can

sectoral models together

Single sector models

I International Journal of Forecasting

5.3. Other approaches

P.G. Allen I International Journal of Forecasting

on how the budgets would be updated,

squares was best in 2 years and OLS in 1. Using

and large scale econometric

i I~~ernariona~ Journal of Forecasting

policy proposals. Forecasting was incidental; one

include Chen (1977) and Roop and Zeitner

I International Journal of Forecasting 10 (1994) 81-135

time series data access method