Pinpointing Policy: The Importance of USDA Reports
On Friday, Aug. 11, seven Farm Bureau members in Kansas entered the United States Department of Agriculture’s (USDA) South Building in Washington, D.C., to observe the August USDA "Lock Up" and release of the US Crop Production and World Agricultural Supply and Demand Estimates. These members were part of Farm Bureau’s 13th USDA Reports Trip, a roughly 50-hour excursion beginning in Kansas City, tracing how USDA collects crop data, and disseminates it into state, national and world reports.
KFB members front row, left to right, Dale Helwig, Zoe Kaiser, Michelle Rickel and KFB Board member, Dan Schmidt. Back row, left to right, Roy Rickel, Kansas State Statistician, Doug Bounds, and KFB Board member, Jim Sipes. Back row, Mick Rausch.
Our goal with this biannual trip is to provide an opportunity for members to see, study, question and better understand the data provided by USDA, through both National Agriculture Statistics Service (NASS) surveys and World Agricultural Outlook Board (WAOB) World Agricultural Supply and Demand Estimates (WASDEs). We are accompanied by our Kansas State Statistician (a NASS employee), Doug Bounds, who not only formally presents information but also is available to answer questions as they occur throughout the trip. As Director of Commodities, my hope for these participants is for them to fully understand how these reports are developed, get their questions answered (and those they hear in the coffee shop), and encourage them to be advocates for USDA’s data gathering and reporting process.
Why do we need these reports? Because we need sound information about what’s going on in agriculture. American Farm Bureau Federation’s (AFBF) policy 157 / Media states, “4. To make vital decisions, farmers and ranchers need detailed and timely weather information, local news, up-to-the-minute market reports and news affecting production agriculture. USDA provides a tremendous amount of information the media disseminates, and this has been going on for a long, long time. Doug shared our nation’s first agricultural was conducted in 1791, the direction of Pres. George Washington. Additionally, USDA was established by Abraham Lincoln in 1862, and the first “official,” Crop Report was issued in July 1863.
AFBF policies 209 / Sugar, 211 / Tobacco, 238 / National Dairy Program, 309 / Livestock Information Reporting, and 455 / Agricultural Reports, all list specific agricultural data Farm Bureau members want USDA to collect and report. 455 / Agricultural Reports, 2.16, goes on to state, under we support, “Cooperation with NASS by producers to submit their best estimates on crop report questionnaires or to provide information to enumerators. AFBF policy 462 / Role of USDA, 12.2. states that USDA should be, “An accurate source of agricultural data and research;” 13.1. states we support USDA programs that, “Help farmers obtain needed crop and market information, research, educational assistance and credit,” and 14.27. states USDA should, “Continue the release of crop condition reports as they are useful to agricultural producers and should maintain their current release schedule.”
And lastly, if you agree with me that agriculture and our rural communities are truly the backbone of America, then shouldn’t our government and citizens be informed and better understand agriculture and our rural communities?
- Food security – What do we grow in the United States, and can we adequately feed our population?
- Food and agricultural policy – What U.S. agriculture “go?” How many farms are there, how big, what are their costs, what prices are they receiving, and how and where are their products shipped?
- Farm bill – Building the safety net. What are prices and local yields, and what are the risks today’s farmers and ranchers face?
In fact, NASS conducts hundreds of surveys every year that touch every aspect of U.S. agriculture. To name a few, NASS surveys provide data:
- To help associations (like Kansas Farm Bureau), businesses and policymakers advocate for their industries and educate others on the importance of agriculture. One piece of information I like was from the 2017 Census showing that Kansas leads the nation in no-till acres! We include that tidbit whenever we advocate for the safe use of agricultural chemicals because it is often those very same crop chemicals that make no-till, and its soil, air and water conservation properties possible.
- Used by Federal and state agencies, such as the Farm Service Agency (FSA) for Conservation Reserve Program (CRP) soil rental rates and Individual Agriculture Risk Coverage-Price Loss Coverage (ARC-PLC) program prices and yields, the Environmental Protection Agency (EPA) for actual chemical usage rates (yes, this data comes from those long and intrusive Agricultural Resource Management Surveys (ARMS), and the Kansas Department of Revenue (KDOR) for determining use-value appraisal values.
- And maybe the most impactful use, for crop and livestock production estimates that any point in time represent the best available data, can and sometimes do impact prices, and from which all market analysts and talking heads base their analytical models on.
Who are the players? When it comes to monthly livestock and crop reports, there’s several USDA agencies involved.
- NASS: Statisticians and data collectors who primarily use surveys to develop estimates of specific crop and livestock details at given points in time (i.e., intended plantings, acreage planted, acreage harvested, yields, stocks of grain, farrowing intentions, livestock inventories, etc.). They also use other sources, for example for the crop production reports we observed in August, NASS used farmer survey data, satellite data and FSA certified acres. The wheat production estimates also included in-field data collected by NASS enumerators and if the wheat field was already harvested, actual yield data provided by the grower.
- WAOB: A small group of economists who review and approve the Interagency Commodity Estimates Committee’s (ICECs) monthly WASDEs.
- ICECs: Analysts from five USDA agencies, the office of the Chief Economist, Agricultural Marketing Service (AMS), FSA, Economic Research Service (ERS), and the Foreign Agricultural Service (FAS), that use available data, their experience, knowledge and analytical models to prepare the monthly WASDE reports. Note: The WASDE reports are those that bring in both supply and demand factors/estimates, result in projections for ending stocks (which is the primary price mover), and while NASS data is used, NASS personnel are NOT involved.
Clearly, USDA reports provide vital information and are supported by Farm Bureau policy. Yes, they can and do affect prices. In fact, the day our group observed the lockup, prices were impacted. AFBF’s headline on the reports was, “August WASDE: Dialed-Back Yields Still Suggest Large Corn, Soybean Crops,” and with larger crops expected, commodity prices reacted negatively. December corn futures fell nine cents the day of the report, November soybean futures 10 cents and December hard wheat futures were down 13 cents. Since that time, corn and wheat futures have drifted sideways, but November soybean futures are up 60 cents at the time of this writing versus Aug. 11. As is always the case, fundamentals, and our perceptions of fundamentals (i.e., this summer’s heat, the ongoing situation in Ukraine, etc.) continually change, and prices continually react for better or worse.
Remember, USDA, including NASS surveys, and WAOB and ERS reports, are one of the few providers of agricultural information that is totally unbiased (they’re not bought, sold or influenced by either buyers or sellers of commodities); timely (they provide data often in advance of other sources); consistent (roughly following the same statistically sound procedures each time, making them the “final word”); and transparent (ensuring that ALL participants have equal access to their reports and information at the same time).
If you’d like to learn more about USDA reports or if you’re still somewhat of a skeptic/critic, I hope you join us in August of 2025 for our next KFB-sponsored USDA Reports trip to D.C. Before then though, don’t hesitate to contact me at email@example.com with any questions, comments or concerns.