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In 1905, the USDA Crop Reporting Board was created, but the roots of agricultural surveys can actually be traced all the way back to President
George Washington. From phone calls, to mail surveys, to the newest online surveys, the National Agricultural Statistics Service (NASS) mission statement is to “provide timely, accurate and useful statistics in
service to U.S. agriculture”.
Although the list of reports includes topics such as broiler hatchery, catfish processing and aquaculture data,
wheat farmers are probably most familiar with the weekly crop progress and condition reports, the monthly supply and demand reports, and the quarterly stocks, production and acreage reports.
On Wednesday, Sept 30, USDA/NASS will release a report that directly impacts the spring wheat market; Small
Grains Summary. This report will list production for all wheat classes, barley, oats and rye production. Beginning on August 28, and finishing on Sept 12, your local state National Agricultural Statistics Service
will begin surveying farmers to assess their small grain production. Nearly all surveys are conducted by phone, but some are conducted through the mail, in person or through the new online survey website. Data from
over 6,000 farmers in North Dakota, South Dakota and Minnesota will be used in the survey. Approximately 80% of surveyed farmers respond to the surveys.
Despite the belief that “prices always drop after USDA reports”, the upward and downward price movements after
USDA reports are nearly identical. USDA/NASS looked at the 124 Crop Production reports from 1987 to 2008, and found that the day after the report, the wheat market increased 58 times, decreased 55 times and had no
change 11 times. The average price increase after the report was 6.7 cents, and the average decrease was 5.1 cents. Similar results can be found for the corn and soybean markets, and also if you look at prices one
week later. There is no bias for higher or lower prices, but that does not mean those big reports stick in your mind. Nearly every farmer can remember that one report, maybe from four years ago, that caused prices
to lock limit down.
Most private grain trading firms conduct their own surveys in advance of USDA reports, but NASS is unbiased
when reporting agricultural statistical data. “We can’t actually trade on the market because we have access to the data before the reports come out,” says Darin Jantzi, Director of the North Dakota office of NASS.
“We sign forms stating we cannot and will not trade. If any NASS employee is caught trading, a fine and jail time are guaranteed.” The director of NASS is also not a political appointee, so the functions of NASS
remain the same regardless of which political party has control of the White House.
USDA reports are always eagerly anticipated by market watchers because the information is believed to be
accurate, unbiased, and timely. Whether the information in the report is good news for buyers or sellers is not a concern, which is why the reports are so valued by buyers and sellers. On Wednesday, September 30, at
7:30 am, watch for the Small Grains Summary. Whether it brings us higher prices, or lower prices, it is a report that will be carefully watched by traders around the world.
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