AEDE Associate Professor Ani Katchova’s service as Chair of a USDA Review Panel ended this past summer when she and the rest of the panel members delivered their findings after a two-year long review of the USDA’s Economic Research Service (ERS) Farm Income and Wealth Forecast Program.
The USDA publishes these forecasts four times before publishing a final estimate for farm income and wealth. “Our task for the panel was to study how ERS makes farm income forecasts and estimates for the U.S. and state farm sector income and to offer recommendations for improvement,” Katchova said.
The panel reviewed how the forecasts and estimates for the income statement and balance sheets are made and offered specific recommendations on using best data sources and latest methodology.
The review panel also examined the accuracy of the forecasts for farm income and its components. “We studied how ERS makes farm income forecasts and estimates for the U.S. and state farm sector income,” Katchova said. “We determined a pattern of under predicting of farm income, particularly with the first February forecast.”
“This review brought together the farm income forecast work done by the Farm Income team at USDA and the farm income and finance research we do here for the Farm Income Enhancement Program at Ohio State. This work enhanced both farm income programs at USDA and OSU,” Katchova said.
The latest farm income forecast released by USDA in August shows that net farm income in 2019 is expected to increase 4.8% from 2018 to $88 billion. These forecasts are widely disseminated and used by policy makers and market participants to help understand the changing economic conditions for farmers and ranchers.