Alternative Methods for Estimating Changes in Production From Data on Acreage and Condition

Reports on prospective plantings are designed to aid farmers in deciding among alternative crops before the planting season. In this connection, they are a useful guide only insofar as they assist the farmer in forecasting probable levels of, or changes in, relative prices. Prices during the ensuing marketing year for each of the crops that a farmer can grow depend on the particular supply and demand conditions that affect them. Two assumptions usually are made implicity with respect to factors of demand: (1) That possible changes in demand will affect the several alternative crops about the same and in such a way that they will affect the ratio of one price to another very little, and (2) that any differential effects of changes in demand can be forecast by economic analysis. Changes in production, however, frequently have important effects on relative prices and, in general, cannot be forecast by economic analysis. Hence, a survey of farmers' intentions is used instead. As farmers cannot forecast probable yields before planting, the survey is confined to intentions with respect to acreage. This article explores alternative ways of translating the acreage intentions data into the more meaningful decision-making variable, prospective changes in production for specified crops and, as a byproduct, indicates how useful the data are for this purpose. If a majority of farmers change their minds with respect to plantings after the report is issued, then the data regarding intentions to plant would give a poor forecast of production. But these analyses indicate that, on the average, for many crops data on intentions to plant are a useful guide to forthcoming production. Included also are analyses of the usefulness in forecasting production of data on acreage seeded to winter wheat and rye published before harvest in December, of data on acreage of cotton in cultivation in July, and of data on condition of specified crops.