Mississippi Agricultural News:
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USDA Lock-in Yields Good Market InsightsBy Bonnie Coblentz MISSISSIPPI STATE -- Six Mississippi State University representatives were U.S. Department of Agriculture guests in Washington, D.C., as they saw first-hand the secure way this agency compiles its monthly crop production report. Leighton Spann and Artis Ford, co-hosts of Farmweek, an agricultural news program produced by MSU's Office of Agricultural Communications, participated in USDA's Sept. 10 lock-in. They were accompanied by MSU Extension Service agents Charlie Stokes, Monroe County; Allen McReynolds, Wayne County; Art Smith, DeSoto County; and Don Smith, Adams County. All were guests of Mississippi statistician Thomas Gregory of Jackson. At these monthly sessions, USDA statisticians compile state yield projection data into a national outlook report. Because the results of this compilation have a direct impact on commodity prices and markets, USDA tightly controls who has access to the information before it is made public. The end product is a USDA National Agricultural Statistics Service Crop Production Report signed by the Secretary of Agriculture. "The results of this Crop Production Report have such a great impact on world prices," Ford said. "Fortunes can be made and lost on the report we saw released." The Mississippi contingent was invited to get a behind-the-scenes look at this process. "As producer of the weekly marketing segment on Farmweek, participating in this lock-in gave me a much greater appreciation for the way USDA seeks to ensure the accuracy of their crop report," Spann said. According to the National Agricultural Statistics Service, the lock-in was established to safeguard the integrity of the crop estimates. "Production forecasts for corn, wheat, cotton, soybeans and oranges are defined by law as speculative because they are traded on commodity markets," online information about NASS states. "Anyone having early access to this information would have an obvious advantage in trading, so the Agricultural Statistics Board goes to great lengths to prevent it." Encoded data is sent from states to the Agricultural Statistics Board prior to the lock-in. This data is saved on diskettes, locked in a safe and the original computer files are purged from the system. The day of the event, statisticians access the individual state data and prepare the official, national estimates in a room that is kept locked and guarded by officers. Windows are sealed and shades draw, telephones disconnected and computers secured against tampering. The lockup area is monitored for electronic surveillance equipment, and employees preparing the report cannot leave or contact anyone outside the area until the report is printed in the secure room. "No unauthorized person has access to the data or analysis of a report before it is issued. Not even the Secretary of Agriculture knows a report's contents until entering the lockup area to sign it just before release," NASS stated. "Being involved in the lock-in gave me a much greater appreciation for the lengths USDA goes to as they ensure that nobody has an unfair market advantage by obtaining the information early," Spann said. Gregory, Mississippi's statistician, attended the September lock-in as a guest, although he is responsible for submitting Mississippi's monthly yield estimates and has been a working member of the team compiling previous reports. He said USDA invites guests to demonstrate their commitment to security. Guests can see the steps taken to ensure the data is untainted and not used to unfair advantage in commodity trading. "The agency likes to bring in members of the public to see the security that prevents insider trading and so they see firsthand that the numbers are not affected by politics," Gregory said. Released:
Sept. 27, 1999 |
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