Price Forecasting Accuracy of the OECD-FAO's Agricultural Outlook and the European Commission DG AGRI's Medium-Term Agricultural Outlook Report

Abstract

The OECD-FAO's Agricultural Outlook and the European Commission DG AGRI's Medium-term agricultural outlook report provide price forecasts. Users of these forecasts may be interested in their accuracy. This paper measures the accuracy for values forecast for the following year. These are very accurate as regards the AO EU price of poultry, the EC outlook price of common wheat and feed barley, but not so accurate as regards the EC outlookon beef prices. In some cases, discrepancies between the forecasts follow a systematic pattern. The paper also discovers how the OECD-FAO's outlook projections for a common wheat world representative price are changing from year to year. Usually they are positively correlated, but there are certain exceptions where their correlation is significantly negative. This means that the price projections of some commodities may vary dramatically.