As the political impasse continues in Washington, farmers and ranchers are still selling cattle, harvesting corn and marketing their products, all while the doors at USDA offices around the country remain closed.
Those closures, specifically the lack of USDA Agricultural Marketing Service data, will create gaps in historical information that at least one economist says will have long-term effects on today's agricultural producers.
What's more, notes Glynn Tonsor, Kansas State University livestock economist, no one is certain when the government shutdown – and subsequent lack of information – will end.
"I don't know how long this will last, but context is important," Tonsor noted in a K-State brief. He said that while common farm activities have continued during the now more than two-week long shutdown, traders are relying on non-federal resources for market information.
Gaps in federal data will have long-term effect on marketing decisions
In turn, that's changing ag price discovery, how prices are reported, and how people make buy-sell decisions, Tonsor says. He notes that most information is coming from private sources – not those considered generally unbiased, like the USDA or public universities. A private provider, for example, might show a rosier example of prices to cow-calf producers, if that's its targeted audience.
"I don't want to come across as an advocate for USDA, but I have made a point to try to raise awareness to ag producers that a lot of publicly gathered data gets repackaged, and folks like me and others end up bringing it to them," Tonsor says. "Understanding where that data comes from, how it's collected and the fact that it isn't collected for free, is very important."
While the shutdown continues, Tonsor says decisions will still be made and markets will still respond to information, but the logistics of the whole system have changed.
"We're still going to find a price that makes transactions go forward, but the cost of that price discovery system, at least in the short term, has gone up," Tonsor says. "Everybody is adjusting to find this information somewhere else, and maybe it's not as efficient. Not everybody has the same network. Not everybody has access to the same private data sources."
Tonsor says aside from immediate effects lack of information has on the markets, there will also be gaps in historical perspectives for many sectors.
The feeder futures market, for example, has a cash settlement index that is based on prices reported from various parts of the country. Tonsor says because no information is being collected now, there won't be the ability to build that index for the traditional way of settling the feeder cattle contract.
"We are definitely building gaps, some of which will not be resolved even if the shutdown ended right now," Tonsor said. "Every day, every minute that goes by, there is something that is not being captured that won't be back-filled. Some things that are being captured won't be back-filled because of computer systems being down. So you have gaps in the data series."