Testing the optimality of USDA's WASDE forecasts under unknown loss

Abstract Motivated by the long‐lasting debate on whether United States Department of Agriculture's (USDA's) World Agricultural Supply and Demand Estimates (WASDE) forecasts are optimal, we employ an unknown loss method for ex post evaluation which assumes that USDA forecasters' function is unknown. We conduct optimality tests WASDE corn, soybeans, wheat published during 1988–2019. Our results suggest forecasters generally realize data‐generating process. findings consistent with previous studies when narrowing down more general to symmetric or asymmetric a specific shape function. This study provides implications based can boost their information set as alternative way improve forecasts. [EconLit Citations: D84, E37, Q13, Q14].