Though many of you may not have heard about it at the farm level this spring as you anticipate tightening budgets for your farm’s upcoming 2024/25 marketing year, USDA’s National Agricultural Statistics Service caused an outcry from the data user community when it announced that a series of reports would be ended in the coming year due to budgetary constraints earlier this spring.
To be fair, this was around the same time that the missing Kate Middleton conspiracy theories were breaking the internet, so I understand if you missed that headline.
The April 9 NASS announcement found that the upcoming July Cattle report will be cancelled and the County Estimates for Crops and Livestock as well as the Cotton Objective Yield Survey would be discontinued beginning with the 2024/25 marketing year.
The cuts were made because of budgetary constraints. Over the past 15 years, even though NASS’s nominal budget has increased, the budget has actually shrunk when adjusted for inflation.
“Data collection is a big cost,” Troy Joshua, director of NASS’s Statistics Division, explained. NASS estimates the expenses of conducting the reports as follows:
July cattle report – $550,000
Cotton objective yield – $500,000
County-level production estimates – $7 million
Despite muted farmer reaction to the cancellation of these reports, the analyst community exploded with concern about the sudden disappearance of data and how it could impact farm-level decision making.
Making lemonade out of lemons
Data alternatives exist, but they have their limitations.
While USDA releases monthly Cattle on Feed and Livestock Slaughter reports that help to clarify cattle inventory levels across the U.S., it only publishes total population data on the livestock herd twice a year – in January and July. That figure will only be reported in January going forward.
And with more younger producers across the Heartland raising cattle to build capital for an eventual farmland purchase, the reduced data insights could cloud price transparency and make profit opportunities more difficult to capture for these beginning farmers.
For the county estimates, the Cropland Data Layer program and NASS Disaster Analysis can provide alternative insights to county-level crop and livestock production. Farm Service Agency’s Crop Acreage data and the Risk Management Agency’s Summary of Business and Area Plans Historic Yield reports also can provide granular insights.
But the reports from FSA and RMA are not generated for the same statistical purposes as NASS publications and can use different methodologies. And as some farmers can attest, lower yield responses tend to be reported to RMA for insurance payouts while higher acreages are more likely to be reported to FSA to guarantee maximum program benefits.
The NASS county-level data helped to smooth out these biases to provide a more reliable estimate for county-level production.
Farm-level impacts
To be sure, the loss of these datasets will not degrade the reliability of NASS yield, acreage, and production estimates at both the national and state levels (except maybe for cotton) due to be published later this summer, which are primary drivers of supply-based price movement for ag commodity markets.
But the budget cutbacks represent a bigger problem. As part of the cuts, NASS was also forced to put on hold all data modernization efforts which were going to be welcomed by an analyst community long frustrated by working with aging systems. Agency training has been trimmed and travel costs will be reduced, limiting outreach.
Data is not perfect, but the market is always right. Price movement will reflect the market’s best guess and USDA typically provides the most reliable data for those market decisions. While poring over the data is not near as exciting as catching up on celebrity gossip, understanding the nuances of these reports can play a crucial role in the success of your marketing plan.
As budgets tighten at the farm level over the next couple years, it is imperative that the ag community has reliable data to use for decision making. These datasets may not have a direct impact on your daily on-farm activities, but they have been widely used by merchandisers, end users, analysts, bankers, and traders to predict and influence where and when price and production movement may occur.
What can you do?
Want to make sure this data doesn’t disappear like Kate Middleton? The U.S. government’s fiscal year ends on September 30 and NASS is approaching the end of its budgetary planning process. Funding for the slashed programs comes from the annual NASS appropriation from Congress.
“It was not our desire to stop producing these data products,” Agricultural Statistics Board chair Lance Honig professed in a May 2024 webinar to address the changes. “But at the end of the day, we do have to operate within our budget constraints.”
In a capitalistic society, open and available information increases profit opportunities for more players. Contact your local government representatives to let them know this data matters to your farm’s future profitability and that approximately $8.05 million funding should be reallocated to NASS to ensure the public’s access to reliable agricultural data.
“We’d love to bring it back, but we have to make a decision sooner rather than later,” Joshua cautions.
