USDA Short-Term Annual Supply and Demand Projections
Provide a Benchmark
Each month, the U.S. Department of Agriculture (USDA)
publishes annual supply and demand forecasts for major
crop and livestock commodities for the nation and the world.
These forecasts appear in USDA's World
Agricultural Supply and Demand Estimates (WASDE).
ERS analystsas well as those from other agencieshave
an important role in conducting research and analyses that
help shape the WASDE forecasts for major grains, soybeans,
and livestock. WASDE forecasts are used as benchmarks in
the marketplace because of their comprehensive nature,
objectivity, and timeliness.
Annual forecasts appear monthly in WASDE for:
-
Crops (U.S. and world)wheat, rice, feed grains
(corn, sorghum, barley, oats), soybeans, cotton, and
sugar.
-
Livestock (U.S. only)meat animals, poultry,
and dairy.
By defining the fundamental conditions in commodity markets,
these forecasts affect decisions made by farmers and ranchers,
other businesses, and governments.
Interagency Committees Coordinate Agricultural Commodity
Projections
Several USDA agencies contribute to development of
the projections appearing in WASDE, including the Agricultural
Marketing Service (AMS), Economic Research Service
(ERS), Foreign Agricultural
Service (FAS), and Farm
Service Agency (FSA).
The World
Agricultural Outlook Board (WAOB) coordinates the
process, chairs the interagency committees for each commodity,
and issues the WASDE report.
The National Agricultural
Statistics Service (NASS) does not participate in
the interagency committees, but provides most of the
U.S. crop production forecasts and data for livestock
production forecasts. NASS also provides monthly and
historical prices and other data.
How the Short-Term Forecasting Process
Works
The process combines data and information. Analysts
use survey
results from NASS, market
news reports from AMS, trade
data from the Deparment of Commerce, foreign
attache reports and satellite imagery from
FAS, recent weather
information analyzed by WAOB meteorologists, program
information and data from FSA, and other
commodity-specific sources.
The monthly projections process combines:
-
DataResults of producer and industry surveys
conducted by NASS, AMS, and other agencies.
-
Economic
models and statistical analysisAnalysis
conducted by agencies regarding all aspects of the
balance sheet.
-
Expert judgmentContext and experience brought
to the process.
Projections are developed during a 2-week, consensus-based
process that produces the WASDE report. WASDE is generally
released between the 8th and 12th of the month at 8:30
a.m.
ERS releases outlook
reports and FAS issues commodity
circulars shortly after WASDE. They provide additional
data and key insights into the factors shaping markets. ERS analysts also develop supply, demand, and price forecasts
for commodities not included in the WASDE projections (fruits and vegetables) in coordination with the World
Agricultural Outlook Board (WAOB).
ERS publishes the following outlook report series:
Supply and demand projections developed during the interagency
process play a key role in developing farm-income and food-price
forecasts, and are frequently used as a starting point
for analysis supporting short- and long-term policy decisions.
USDA Also Develops 10-Year Agricultural Baseline Projections
The baseline projections are
prepared using an interagency process similar to that used
for short-term projections. The projections are reviewed
and cleared by an interagency committee that is chaired
by the WAOB. ERS has the lead role in preparing the annual
baseline report. The baseline projections are developed
using a specific set of assumptions that, unlike the short-term
projections, represent only one scenario of what the future
may hold.
These 10-year supply, demand, and price projections are
for major commodities and based on
- Specific assumptions (e.g., normal weather, the continuation
of current law), which may or may not be realized.
- A composite of models and judgmental analysis.
In addition to major crop and livestock commodities, it
also includes projections for fruits, vegetables, and tobacco.
The baseline also contains projections for farm income,
food prices, and the value of U.S. agricultural trade.
The baseline projections are published annually in February,
after the President's Budget is issued. They are used for
the preparation of the President's Budget and as a benchmark
from which to conduct policy analysis (for example, on
the expected impacts of greater trade liberalization on
the agricultural sector).
ERS's Forecasting and Research Programs are Strongly
Intertwined
Long-term research at ERS produces critical information
that helps shape our knowledge of markets, how they operate,
and how they are changing. The outlook program helps ERS
focus on key issues facing policymakers, farmers, and industry.
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