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Quantifying Market Uncertainty in Agriculture

Graph showing how ending stocks are affected by US production forecast error.

Harvest partner Dr. Joe Glauber - former Chief Economist of the USDA - is embarking on a series of educational blog posts for IFPRI’s Food Security Portal, the first of which corresponds to his recent presentations at the AMIS and Harvest Conferences with a focus on the uncertainty in agricultural markets.

Crop production statistics are an important asset for commodity markets around the world. Important decisions based upon crop production estimates are made around the clock by different actors during production, trade, storage, marketing, policy design, etc. Timely and accurate information is crucial for improving market function and enhancing market transparency. By improving the accuracy of forecast information, food insecure areas can avoid unexpected crises such as the unexpected need for an influx of imports if a drought occurs, or vice-versa a deluge of exports in the event of a bumper crop. 

Dr. Glauber’s upcoming blog post will address estimating the practical value of Earth observation (EO), how uncertainty is resolved in markets, and the role to be played by EO data. In recent years, with the spread of open data, new satellites and sensors, and open access to numerous satellite imagery sources and products, EO data is taking a bigger role in helping improve crop production estimates. Harvest’s partnership with Dr. Glauber and IFPRI supports this data distribution by connecting and funding partners around the globe who are working to improve forecasting and market stabilization. To learn more and follow along with the blog series, visit IFPRI’s Food Security Portal.

News Date
Aug 12, 2019