Canada Markets

Acreage Changes From the Initial AAFC Estimates

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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An indication of the challenges faced in estimating acres, here are the changes in acreage seen between the earliest estimates released by AAFC in January to Statistics Canada's field crop areas released in April for selected crops over the past five years. (DTN graphic by Nick Scalise)

On Feb. 23, the USDA held its annual USDA Outlook Forum, releasing its first glimpse of what may come in the upcoming crop year. DTN Ag Policy Editor Chris Clayton attended the meeting in Washington, called it a "fantasy crop forum for aggie economists," given the challenges faced in generating forecasts that involve many moving parts.

Thursday's DTN Fundamentally Speaking blog by DTN Special Correspondent Joel Karlin titled Acreage Changes From USDA Outlook Forum, looks at the change in estimated acres between the February Outlook Forum and the end of March Prospective Plantings report in the United States. As concluded by Karlin, "these figures (February Outlook estimates) can and often vary from the government's survey of farmer intentions as reported in the Prospective Plantings report released the end of March.

The attached chart looks at the change in the estimated seeded acreage for selected Canadian crops between the Agriculture and Agri-Food Canada's first look at new-crop forecasts released in January to Statistics Canada's first look at seeding intentions released in its April Principal field crop areas released roughly three months later in April.

When considering the simple range of the data (highest value less the lowest value), canola acres have shown the greatest variability, as can be seen by the yellow bars on the attached chart. The April report estimated canola acres lower than the January report in four of the five years, while the range was 2.721 million acres, from a January-through-April increase in acres of 604,000 acres in 2012 to a 2.1 million-acre drop in 2013.

Other crops showing higher variably include wheat (1.612 million acres), oats (1.345 million acres) and soybeans (1.254), with the range in brackets. The crops indicating the smallest ranges of those shown include durum (291,880) and dry peas (515,650).

While the range of data may not be particularly useful given potential distortions due outlier data, the standard deviation was calculated using Excel for each grain for comparative purposes (not shown). Results mirrored those obtained from the calculation of range, with durum showing the smallest standard deviation at 119,904 acres while canola was calculated at 1.070 million acres, the highest of the selected grains.

As indicated in both this and Karlin's study, there is and always will be variability in cropping forecasts, especially those conducted early in the season. Perhaps this data could be viewed as "noise." As indicated by DTN Senior Analyst Darin Newsom in Understanding DTN's Six Factors (approach to grain marketing): "The DTN Six Factor methodology is based on eliminating the noise that clouds most decision- making by focusing on what the market is saying about itself."

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