Week Two of the current government shutdown saw no indication of a ceasefire in this cold war over funding in the nation’s capital. On the front lines is a host of invaluable livestock, trade, and commodity reports.
The shutdown, which started Dec. 22, 2018, continues to erode access to government-hosted information, shut down USDA services including ag funding and nutritional benefits, and forces hundreds of thousands if not millions of federal employees to go without pay. While there are many potential casualties of this spat, vital market data and cattle-related information might be the most underappreciated victims.
This coming Friday, Jan. 11, was originally slated as the release date of numerous market reports including the monthly and annual Crop Production reports, the quarterly Grain Stocks report, and the monthly World Agricultural Supply and Demand Estimates (WASDE) report. While the data for some of these reports was already collected prior to the shutdown, the process of analyzing it and compiling it for publication takes time.
Joe Glauber, former USDA chief economist and current senior research fellow at the International Food Policy Research Institute, told DTN that it can take a minimum of four to five work days for the USDA’s National Agricultural Statistics Service (NASS) staff to effectively process the data.
“I suspect after the 4th, by Friday, they will have to make a decision about whether to postpone the [January] 11th report,” Glauber told DTN’s Chris Clayton on Wednesday last week.
“But I would think if you get the shutdown over in the next week or two, then you add four or five business days and get the report out then.”
DTN’s Lead Analyst Todd Hultman noted that the NASS crop reports, particularly WASDE, are important year-end records. WASDE is often seen as the final crop estimate of the season.
Hultman noted WASDE would be particularly valuable this year as insight into the South American soybean crop and U.S. soybean supply in light of the nearly non-existent trade with China and the fact the U.S. government is not publishing export sales.
Cattle interests
Other reports of specific value to the cattle industry are also at risk. The monthly Cold Storage report (due Jan. 22), the monthly Livestock Slaughter report (Jan. 24), the Cattle on Feed report (Jan. 25), and biannual Cattle inventory report could be delayed or skipped altogether, depending on how long the shutdown lasts.
“The amount of data that will not be disseminated cannot be understated,” noted the CME Daily Livestock Report (DLR) just before the New Year. Speaking specifically of the Cattle inventory report, it went on, saying, “While the release date is still a few weeks away, the survey work that makes that report possible needs to happen right now.
“Without the Jan. 1 supply benchmark, market participants will be left guessing as to the supply of cattle in and outside feedlots, the size of the breeding herd and the number of calves that were produced in 2018. The ability of futures markets to price cattle for the remainder of the year will be seriously impacted the longer this situation continues.”
In addition to the market reports, the biannual Across-Breed EPD (expected progeny differences) Adjustment Factors have been postponed indefinitely pending the restart of the government. This hits WLJ and our crossbreeding readers because we will not be able to publish those tools in the upcoming North American Bull Guide magazine as has been our tradition. This comes despite working closely with those at the U.S. Meat Animal Research Center.
The guys behind DLR commented that the current shutdown’s impact on the cattle markets is like a train running at 100 miles per hour when the locomotive gives out.
“…[F]or a little while you may not notice the difference. But eventually gravity will assert itself. So with markets. They may continue to function for a bit even as the quantity and quality of information deteriorates. Eventually, those with more resources will be able to access information not available to everyone else and the one that loses is the small producer that is left guessing.” — WLJ
