Why Government Shutdown is a Detriment to Agriculture

January 11, 2019 02:17 PM

The partial U.S. government shutdown is closing out day 21, and is now tied for the longest government closure ever. As the majority of the government is stalled, it’s impacting major USDA reports - including the January WASDE and Crop Production reports- originally scheduled to be released Friday.

No updated data means much of the trade is in the dark regarding the size of the 2018 crop, according to Scott Brown, University of Missouri economist. He said the 2018 corn crop may be smaller than USDA originally thought, a factor that could give corn prices a short-term boost.

For now, the trade is reacting to little hard data, which he said is a negative for the agricultural markets.

“More information is always preferred than less,” said Brown. “So, I think having no USDA reports is a detriment.”

Brown said once the government reopens, and USDA finally releases the January Crop Production and WASDE reports, the trade will respond; however, the response will be delayed, creating more sideways price action in the interim for commodities like corn.

“I think the trade will react to it,” Brown said. “I guess some of those that have private information might have information above the rest of us that might be waiting for public information. So, whoever has information is going to be really important in this period of no reports.”

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Spell Check

owatonna, MN
1/15/2019 06:36 AM

  the shut down is the best thing for us farmers no reports yes!! I hope it last all year ag web said we would not get second trump payment they were wrong now they talk to some collage professer he is wrong don't trust ag web any more I can not see the down side of the shut down

Milan, OH
1/14/2019 08:08 AM

  As I have said previously, we all know the usda could not find their butts with both hands and a flashlight. More record yields again this year ! No , wait a minute, turns out that was not the case was it ??? I can wait to find out what is already known!!!

Clifford Tollini
Onaway, MI
1/11/2019 08:50 PM

  This is how true cash markets operate, no false reports and no speculators with no skin in the game to manipulate the market. I believe like my father and grandfather said food and energy should not be traded.


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