CHARACTERISTICS OF CLIMATE FORECAST QUALITY - IMPLICATIONS FOR ECONOMIC VALUE TO MIDWESTERN CORN PRODUCERS

Using a conceptual forecasting format that is similar to some in curre nt operational use, trade-offs between climate forecast quality and ec onomic value are examined from the perspective of the forecast user. V arious scenarios for climate forecast quality are applied to corn prod uction in east-central Illinois. A stochastic dynamic programming mode l is used to obtain the expected value of the various scenarios. As an ticipated, the results demonstrate that the entire structure of the fo recast format interacts to determine the economic value of that system . Additional results indicate two possible preferred directions for re search concerning climate forecasting and economic applications such a s corn production in Illinois. First, increasing forecast quality by d ecreasing the error between the observed condition and the forecast co ndition may be preferred to increasing quality by increasing the numbe r of predictions in the correct category. Second, com producers may pr efer research to increase the quality of forecasts for ''poorer'' clim atic conditions over research directed toward increasing the quality o f forecasts for ''good'' conditions.