What are the USDA markets? How do they come up with these numbers?
It is very hard to describe into one post everything that goes into the USDA reports. The Agricultural Marketing Service, AMA, has been conducting reports for over 90 years. It is a very comprehensive, monthly report. Reports come in from all over the United States and international locations from USDA officials.
Reports include markets, prices, volume, and bushels. Commodities included in the report are corn, beans, wheat, tobacco, cotton, fruits, for example. Certain fields are earmarked to be a representative field for the year. No one outside the Washington, D.C. office is to know about the final numbers of the report until it is released to the public. There are many USDA employees who work all night compiling the numbers into the report. Until a few years ago, the report was released in the morning. Now it is released in the afternoon.
A few years ago, actually it was four years ago, I traveled to Washington, DC with a group of ag professionals. We were invited to watch the August 2010 USDA report being presented to Agriculture Secretary Tom Vilsack.
Picture opp with Agriculture Secretary Vilsack after the USDA Report Briefing August 2010
(note to self: Don't stand by the tall guys)
Before we were led into the room for the presentation of the report, we were briefed in a separate conference room. They explained us the procedure, gave us a USDA pass, and we left all forms of communication in the conference room. All cell phones, tablets, etc were left in the middle of the table. Then we toured a media room. It wasn't time for the report to go public yet, but some had the numbers in front of them, entering the information into a computer. It is entered into a decrypted data system, and that information is not released electronically until the published time.
Many people play a part of the report, and it is a very big process. They also described the history of the report. Before computers, the report was shared via telephone. Those reporting from DC were in a media room, standing in the middle. At the time of the report being released, they were allowed to go to the perimeter of the room and use the telephones. The USDA employees who gather the information for the report are not allowed to leave the designated areas of the USDA building until the report is released. That means some work all night long.
I realize there is so much that goes into preparing each monthly USDA report. The results that come from these reports impact the grain markets because if the report numbers are not within private analyst estimates, it is impacted immediately. Grain markets can go limit up or limit down if there is a big change in the USDA markets. It doesn't happen every report, but it is possible.
To check out the 2015 upcoming dates for the report, click here. This is the website I always refer to when customers want to know the dates for the next report.