Do we really need USDA’s data collection?
Farmers who believe USDA should not be in the business of collecting statistical information about agriculture and then disseminating it to the rest of the world are getting a chance to see their wishes come true. The shutdown of the government has already halted the USDA’s Market News Service that reports daily prices from every possible commodity and market location. That, in turn, has caused disruption in some futures contracts that are based on price indexes established by the cash prices, which are not being collected. And if the shutdown flows into the weekend, the October 11th Crop Production and Supply Demand Reports will likely have to be delayed, since the crop enumerators will have been on furlough, and not in the field collecting crop data. We’re coming close to finding out what it would be like to not have the data collection and sharing.
After taking hundreds of farmers through the USDA lock ups to watch the process of assembling spring acreage reports, the August First Crop Report, Grain Stocks Reports, and Quarterly Hogs and Pigs reports, there were always some vocal skeptics who expressed their opposition to the concept of having to report their crop data and then letting the market trade it. To them, “It just is not American!” Most were convinced otherwise by the cadre of leaders and statisticians with the National Agricultural Statistics Service, who were always quick to say that if the USDA did not provide that service for everyone, farmers and the market included, and then only the market could afford to collect its own data that would not be shared with farmers.
Kansas State University marketing specialist Dan O’Brien makes a similar statement when he postulates what might happen if USDA reports were sharply curtailed, as they are now with the government shutdown. He says:
1) Grain producers and users would be paying a much more attention to basis and cash price trends at various upstream and downstream locations in the U.S. and world grain marketing system – along with any arbitrage opportunities that may exist from transportation of grain.
2) The market would also be more closely attuned to grain futures carrying charges and the general structure of futures prices as signals of whether to hold and store grain or to “sell now”.
3) Technical market analysis would probably be relied upon more heavily – as ag producers with crops to sell turn as well as users of grain with needs to fulfill would be looking wherever they can for guidance on what to do to fulfill their respect needs.
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