Crop reports’ future left in limbo
Important crop reports will be released weeks late after the United States’ partial government shutdown, leaving investors and farmers without vital information during a tumultuous time for agricultural markets.
The United States Department of Agriculture had planned to release a series of closely watched reports on January 11 but this week revealed that even if the shutdown ended immediately, agency staff would not have time to release the reports as scheduled.
The USDA reports are read widely by investors, analysts and farmers, estimating global farm production of key crops, as well as providing the foundation for understanding the American agricultural industry.
Congressional leaders met with President Donald Trump last Friday but there were no indications the shutdown would end soon.
American grain market analyst Todd Hultman, of Omhaha, said the reports detailed the size of the 2018 harvests of corn, soybean, wheat and other crops, and gave an early estimate for what American farmers would plant in the upcoming season.
“The longer it goes on, the more distorted our reference points get,” he said. “It’s a lot of guesswork.”
Mr Hultman said depending on the estimates, the price of the commodities in the report could rise or fall with the release of the current supply and forecast of how many acres will be devoted to different crops in the coming months.
He said government shutdown had now forced the delay of such reports for two weeks, and uncertainty about the commodity supply would only grow as more time elapses.
The USDA has not released any key reports since December 22.
This includes the closely watched World Agricultural Supply and Demand Estimates report and information about specific crops, including winter wheat and canola seedlings.
The lack of information comes amid the uncertainty of trade with China, where tariffs led to an abrupt drop in US agricultural exports to the country.
There were indications that China was beginning to resume at least limited purchases of US crops but because of the government shutdown it’s unclear what is happening.
University of Illinois professor Todd Hubbs, who studies agricultural commodity markets, said he found the report delays especially frustrating because he thought they could confirm a belief that the US soybean crop was smaller than earlier forecast.
If true, that information would mean a smaller supply and could raise soybean prices, helping farmers who have struggled with low prices worsened by the trade dispute with China.
Until the USDA released its information, investors and farmers could not be certain about where they stood, he said.
“Those kinds of numbers are fundamental,” Professor Hubbs said. “When the USDA produces the numbers, they are the numbers. They move markets.”
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