The reliability of the USDA March 31 prospective plantings report
The much anticipated U.S. Prospective Plantings report was released on March 31, 2015. The USDA summary stated:
"Corn planted area for all purposes in 2015 is estimated at 89.2 million acres, down 2 percent from last year. If realized, this will be the third consecutive year of an acreage decline and would be the lowest planted acreage in the United States since 2010.
Soybeans planted area for 2015 is estimated at a record high 84.6 million acres, up 1 percent from last year. Compared with 2014, planted acreage intentions are up or unchanged in 21 of the 31 major producing States.
All wheat planted area for 2015 is estimated at 55.4 million acres, down 3 percent from last year. The 2015 winter wheat planted area, at 40.8 million acres, is down 4 percent from 2014, but up less than 1 percent from the previous estimate."
The March Prospective Plantings report was compiled by the USDA National Ag Statistics Service (NASS). This report does not equate to the exact number on the June planted acreage report to be released on June 30, 2015 or the final planted acreage report released in early January 2016. It should serve as an intentions of farm operators.
The acreage estimates for this report were based primarily on surveys conducted during the first two weeks of March 2015. The March Agricultural Survey is a probability survey that includes a sample of over 84,000 farm operators selected from a list of producers. The selection process ensures all operations in the United States have a chance to be asked to the survey.
These farm operators were contacted by mail, Internet, telephone, or personal interview to obtain information on crop acreage planned for the 2015 crop year. This includes over 2,900 operators in Iowa.
The national, regional and state reported data from operators were reviewed by NASS for reasonableness and consistency with historical estimates. Each NASS regional field office submits its analysis of the current situation to the Agricultural Statistics Board (ASB). Survey data are compiled at the national level and reviewed at this level independently of each state’s review. Acreage estimates were then based on survey data and the historical relationship of official estimates to the survey data compiled for release on March 31.
Reliability of the report
NASS self-reports the 20-year accuracy of its report estimates (page 34 of the Prospective Plantings report). For corn, the root mean square error for this 2015 report vs. final planted acreage is 1.9 percent, with a 90 percent confidence level at a 3.3 percent margin of error. That means, on average, the March report may be 1.174 million acres "off" from what operators end up actually planting; final planted acres could be above or below the estimated 89.2 million acres.
Over the past 20 years, the March Prospective Plantings report compared to the actual plantings for corn has been too low in seven years and too high on 13 occasions when compared to the final January acreage planted total.
For soybeans, the root mean square error for the 2015 report vs. final planted acreage is 2.1 percent, with a 90 percent confidence level at 3.6 percent margin of error. This means on average this March report may be 1.264 million acres "off" from what U.S. operators end up actually planting; soybean acres could be that many planted acres above or below the estimated 84.6 million acres.
Over the past 20 years, the March Prospective Plantings report compared to the actual plantings for soybeans has been too low in 11 years and too high on nine occasions when compared to the January final acreage plantings.
This March 31 Prospective Plantings report does not equate to the exact June Planted Acreage report to be released on June 30 or to the final planted acreage report in early January 2016.
A major reason for having this annual Prospective Planting report is to let operators and agribusiness know what plans are for planting major crops nationwide. The futures markets adjust quickly to these acreage estimates and a great deal of price volatility can be expected this spring, likely influenced by planting conditions and weather forecasts.
Operators reported intentions to plant 89.2 million acres of corn and 84.6 million acres of soybeans. That’s 1.4 million less corn acres than was planted last year, but about 470,000 more than the average trade guess prior to the report’s release. The decline in corn acres is mostly offset by increased planting intentions for other feed grains (barley, wheat, grain sorghum).
Soybean planted acres in 2015 would be 934,000 more acres than were planted in 2014, yet nearly 1.3 million less than the average trade guess. Planting intentions for other oilseed crops (canola, peanuts, and sunflowers) exceed last year’s plantings by about 190,000 acres.
Attention will now turn to spring weather and planting progress. Excellent planting weather conditions in April and May can result in roughly up to 1 million acre swings from corn and soybean intentions. Wet and cold weather conditions can delay plantings far enough past the optimal corn planting date that some acreage may be switched to soybeans or another later planted crop.
Steven D. Johnson, farm and ag business management specialist, 515-957-5790, firstname.lastname@example.org