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Data, Markets and NASS Reports
By Chris Clayton
Friday, April 12, 2024 4:07PM CDT

OVERLAND PARK, Kan. (DTN) -- At an agricultural markets meeting that focused on data and futures markets, USDA's chief economist defended the agency's decision to cancel three market reports this year, including the July cattle inventory report, while noting that dropping the midyear cattle report "comes at an unfortunate time."

The National Agricultural Statistics Service (NASS) announced the decision earlier this week to drop three reports over the next year due to challenges with the agency's budget coming in late in the fiscal year without any increase in appropriations. NASS is canceling the July Cattle report and discontinuing the Cotton Objective Yield Survey, as well as all County Estimates for Crops and Livestock beginning with the 2024 production year.

"The decision to discontinue these surveys and reports was not made lightly but was necessary given appropriated budget levels," according to NASS.

The Commodity Futures Trading Commission (CFTC) on Friday wrapped up a series of meetings in Kansas, the Agricultural Commodity Futures Conference, or "AgCon." That included a panel discussion Friday on data and information for futures market participants.

Talking about the canceled reports, Arlan Suderman, chief commodities economist at StoneX, said it was a little disappointing to see the lost data because it's so important for a functioning market. He added that he was more surprised by the customer feedback about the canceled reports.

"I was surprised by the feedback we got from customers on this. It was very rapid and very sharp," Suderman said.

He had noted there is user trust in USDA data.

After the reports were dropped, Suderman said customers were "Googling the budget" of USDA and angry over it. He used the analogy of lost trust in a married couple when the husband buys a new boat while the couple agrees they need new siding on the house.

"USDA bought a boat," Suderman said.

He added, "And you can argue that that's the sense of betrayal that our customers have communicated to us in that trust relationship."

Suderman also indicated that producers and others who rely on those lost reports are planning to participate in a NASS user's meeting on April 16 in Chicago. The user's meeting is largely meant to deal with technical details of reports, but industry users also want to get their point across.

"That's the scuttle we are hearing," Suderman said.

Seth Meyer, USDA chief economist, pointed out USDA's fiscal year started last October, but funding was not passed until March. The funding for NASS was not increased.

"NASS has been very diligent about trying to find other ways not to cut reports," Meyer said. "But at some point, there's simply a shortfall, and then you've got to look for things that remain on the schedule. And when you do have some budget uncertainty, you have to make some decisions, and now you have got to budget and now you've got to figure out what you're going to do. So, if it is late, I think you have budget uncertainty, and then you have to figure out how to save that money at the end. Once you finally know what that decision is, there's only so many places to save it that really move the needle."

Groups in the cattle industry have been vocal about NASS dropping the midyear cattle inventory report. The National Cattlemen's Beef Association called the decision to cancel the reports "misguided."

Meyer agreed that losing a midyear inventory report on cattle numbers "comes at an unfortunate time" when the U.S. cattle inventory is at historic lows and showed another 2% decline in the January numbers.

"I think it is incredibly unfortunate that we will not have a midyear cattle report in the midst of a contraction in the cattle cycle and record highs in the fed cattle market, so there is a lot of value in that," he said.

Losing the midyear report takes away details that could show whether cattle producers are starting to rebuild their herds or are still impacted by drought or the costs of forage, for instance.

Meyer agreed that from a market standpoint, losing the midyear cattle inventory report "comes at a very unfortunate time."

"We've been bouncing around with record-high fed and feeder cattle prices. I have been like the rest of the market looking for a signal of a turn. We haven't seen it yet, and we keep looking at other pieces of data," Meyer said. "And this is a good marker for us to calibrate to see where we are, what we see and where are things headed."

Justin Tupper, a cattle producer and sale barn operator in western South Dakota, also participated in a panel discussion at the AgCon on different dynamics in the cattle markets. Speaking to DTN afterward, Tupper said he understands the budget constraints, but he also pointed to the tight cattle inventory and high market prices.

"How they chose that report in a decline when we are at historic low numbers seems a little strange, and I think in the industry that's one of the things to be questioned," he said.

Tupper added, "We do understand the budget constraints, but they turn out a lot of reports and why you would choose that one when we are at historic lows seems odd. And I'm sure there are some back reasons that I don't know. I know what will reverb(erate) through the industry is 'Why that one?'"

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on the social platform X @ChrisClaytonDTN


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