Why Government Shutdown is a Detriment to Agriculture

Farm Bill and the Shutdown 011119
University of Missouri economist Scott Brown says not having USDA reports is having a major impact on agricultural commodities, as the trade always prefers more information rather than less. ( MGN )

The partial U.S. government shutdown is closing out day 21, and is now tied for the longest government closure ever. As the majority of the government is stalled, it’s impacting major USDA reports - including the January WASDE and Crop Production reports- originally scheduled to be released Friday.

No updated data means much of the trade is in the dark regarding the size of the 2018 crop, according to Scott Brown, University of Missouri economist. He said the 2018 corn crop may be smaller than USDA originally thought, a factor that could give corn prices a short-term boost.

For now, the trade is reacting to little hard data, which he said is a negative for the agricultural markets.

“More information is always preferred than less,” said Brown. “So, I think having no USDA reports is a detriment.”

Brown said once the government reopens, and USDA finally releases the January Crop Production and WASDE reports, the trade will respond; however, the response will be delayed, creating more sideways price action in the interim for commodities like corn.

“I think the trade will react to it,” Brown said. “I guess some of those that have private information might have information above the rest of us that might be waiting for public information. So, whoever has information is going to be really important in this period of no reports.”

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