Gone Missing

Stocker price risk could grow with the data void created by the government shutdown.


Wes Ishmael, BEEF Magazine 

Feb 01, 2019


“It hasn’t hurt so far, but I think the market is trickling down because of it. Markets always trade lower on uncertainty, never higher,” says Ted Parker of Ted Parker Cattle, LLC, a stocker operation based at Seminary, Miss.


Parker is talking about the impact of missing public cattle and beef market data due to the longest partial government shut down in history.


Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, likens the current situation to driving down a long, winding road where frequent road signs and mile markers become scarcer.


“You keep going, but if there are no more signs, eventually you don’t know where you’re at or how you got there,” Peel says.


Unlike the last government shutdown in 2013, Peel explains price data from the Agricultural Marketing Service (AMS) continues, so there are market checkpoints.


Even without production data from the National Agricultural Statistics Service (NASS), price data offers some notions about quantity, says Glynn Tonsor, agricultural economist at Kansas State University.


So, no one is flying blind, but the longer the shutdown continues and the more key road signs that are unseen, the more that uncertainty increases.


Arguably, that’s also true of those with access to private market analysis.


Private company economists or Extension economists, like those mentioned here, provide USDA data interpretation, and may also utilize non-USDA data, but all use USDA data as a reference point.


“Those USDA reports may not be right, and it may sometimes feel like some are trading on the information before the reports are released, but we’ve got to have them,” Parker says.


Keep in mind, that’s coming from someone who has the natural hedge of buying and selling cattle about every week of the year, besides managing price risk every other way you can imagine.


“I’ll hedge, feed, forward-contract, a little bit of everything,” says Parker, who earned this year’s Beef Stocker Award, which is sponsored by Zoetis and BEEF magazine.


“At the end of the day, everybody measures against USDA. It might not be right, but it’s official,” Peel says.


Missing data so far ...


More downside risk ahead ...