Forecasting Farm Income: Documenting USDA's Forecast Model
by Christopher McGath
, Robert McElroy, Roger Strickland, Larry Traub, Theodore Covey
, Sara D Short, James Johnson, Robert Green, Mir Ali
, and Stephen Vogel
Technical Bulletin No. (TB-1924) 137 pp, February 2009
The Economic Research Service of the U.S. Department of Agriculture (USDA) develops and publishes estimates and forecasts of three primary measures of income and returns for the U.S. farm economy: (1) net value added, or total value of the farm sector’s production of goods and services less purchases of inputs and services from other sectors of the economy; (2) net farm income, the portion of net value added earned by farm operators and others who share the risks of production, and (3) net cash income, the cash earned from sales of production and conversion of assets into cash. The USDA short-term income forecast model generates forecasts of receipts for individual commodities, Government payments for each program commodity or activity, and expenses for inputs such as fertilizer, fuel, feed, rent, and labor. The report describes the components and equations in the model, showing how components can be recombined to produce the three main measures of income.
Keywords: cash receipts, forecasts, Government payments, net cash income, net farm income, output, prices paid, production expenses, value-added, value of production
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