Keep USDA-NASS as gold standard (Editorial)
Long viewed as “the gold standard” in agricultural data, the USDA’s crop reports are considered the most reliable source of information on the status of crop production in the United States, and therefore often drive the ebb and flow of markets for those products.
A study last year by three Land Grant agricultural economists examined how well the USDA stacks up against private forecasters — a more crowded field now with advances in remote sensing and other technologies — when it comes to crop acreage and production forecasts.
Their results suggest that USDA forecasts “often had significantly smaller errors than their private counterparts. The accuracy of both USDA and private forecasts has improved over time, but the accuracy of USDA forecasts has improved more than that of private forecasts, maintaining the USDA’s relative accuracy advantage.”
But, the authors said, the service can’t stay stagnant in how it does its job.
“It is clear that USDA would not be able to maintain the superior informational value and relative accuracy of its forecasts without continuous updates and improvements in their forecasting approaches to include new technology, and it is important that they continue to be innovative and proactive in the future,” they said.
The USDA’s yield and production forecasts are meant to remove speculation about the size of a year’s crops and are the unbiased source of information used by many market analysts to help provide their market outlook and advice to farmers and agribusinesses.
So, when major weather events — such as the derecho storm last summer that tore through the Midwest — lead to large changes in the reports, or if the markets question if the weather’s impact is reflected accurately in the report, it’s a big deal.
Increasing concern about accuracy and timelines of the reports lead to the formation last year of a USDA-NASS Working Group within the American Farm Bureau Federation, charged with examining NASS’s survey collection and data reporting and making recommendations to ensure accuracy and farmer confidence in the survey results.
“Large changes, especially the last two years due to adverse weather events, in estimates of planted area, crop yields and inventory levels have caused wild swings in markets and left farmers questioning the agency’s ability to respond quickly to rapidly changing conditions on the ground,” said Zippy Duvall, president of the American Farm Bureau Federation. “We hope the work done by this group will provide a framework for USDA to make timelier adjustments to these key reports and restore trust in the data we’ve relied upon for so long.”
After four months of study and attention, the working group issued a report in January boiling the issue down to four key recommendations: Increase transparency with the agricultural community; accelerate new and innovative technology adoption; strengthen the partnership between Farm Bureau and USDA-NASS and strengthen NASS overall.
All the recommendations are important and well-outlined in the report. Transparency in how the reports are generated and data collected will build confidence through understanding.
Implementing new technology will make the reports more efficient, less costly to produce and add to the agency’s reliability.
But crucial in the report’s recommendations translating into meaningful changes is its pledge to advocate for increased funding at NASS.
According to the report, NASS’s budget has been essentially stagnant for the last 10 years.
Of the more than 8,000 funding requests sent to the Agriculture Appropriations Subcommittee for the 2021 budget, only about 10 were for NASS.
“Given the NASS produces over 450 reports annually and magnates around 830 employees countrywide, the agency needs the resources to not only accomplish its mission and serve the agriculture install but to commit to improve its efforts.”
It’s likely NASS knows its limitations and what it needs to improve.
But knowing it and having the money to do change it are two vastly different things, especially in a government digging out of an economic hole.
Having powerful stakeholder like the Farm Bureau going to bat for the agency will mean a lot when it’s time to divvy up dollars again at USDA.
According to the report, the AFBF recently included language in its FY2021 Agriculture Appropriations request letter for enhanced investment for agricultural statistics.
The working group established a partnership between farmers, the agriculture industry and the federal agency and that partnership must remain intact, visible and vocal to make its forecast a reality.