Debunking the Popularity of NASS Reports

If you listen closely, you can hear the familiar screeching and squawking in the distance. For those that know, it’s time to turn off ag social media and tune out much of what will be said on ag media in general — for the next eight months. For those that don’t know, the braincell-killing sounds that are growing louder warn us of the Return of the Kardashians.

No, I’m not talking about the television show that has helped bring the cumulative IQ of the U.S. down by leaps and bounds, but rather the annual start of the National Agricultural Statistics Service’s (NASS) weekly crop progress/condition updates that have done the same thing to the agriculture industry.

Understanding the Flaws Behind the NASS System

These numbers are released Monday afternoons, and are as of the previous Sunday, starting on Monday, April 7 this year. Before I get too deep into this muck, think about that for a moment. Reports tied to government numbers as of Sunday. How many agencies do you know that are open over the weekend? This ties into some of the stories I’ve learned over the years about this particular set of entirely imaginary numbers.

I have so many stories, studies and examples of stupidity tied to these things that they all start to blend together over the years. I’ve railed against these completely made-up numbers until I’m blue in the face, yet they are all anyone wants to talk about this time of year.

So, let’s dive into it. Again.

Story No. 1

A long time ago in a galaxy far, far away I made the rounds of seasonal farm shows talking about markets. At one particular event held every August, fate had it, so I usually followed another “analyst” who never met a United States Department of Agriculture (USDA) report he didn’t like, regurgitating a seemingly endless string of imaginary numbers and calling it a presentation.

As was often the case, this show was deluged by rain, and as I was making my way back to home base, the local USDA agents invited me in to get out of the passing storm. They knew me, or I should say my reputation preceded me, and they opened up about the process behind turning in weekly crop progress/condition reports. Friday afternoon, before everyone heads home for the weekend, they pull the previous week’s numbers, debate what happened with the weather that week, change a couple numbers accordingly and send it in. That’s as scientific as it gets.

Story No. 2

Also, many years ago, I had just finished a radio interview with my friends at WIBW (Topeka, Kansas). After hanging up and grabbing another cup of coffee, I received an email from the host of the show. He wanted to know if one of the listeners could call and talk about what our topic of the day had been: The latest NASS update. It was fine with me. After all, what was one more conversation about the world of make-believe.

The gentleman called, and it just so happened he had recently retired from the agency that puts the weekly silliness together. I don’t remember every word of our conversation, and much of it was off the record, but the one thing he said that still sticks in my mind was, “Your comments about the ‘science’ behind the reports was absolutely correct.” So, I have that going for me, which is nice. 

Story No. 3

A few more years down the road and my constant tilting at windmills had come to the attention of some of the higher-ups at NASS. So much so, a delegation of state and national officials stopped by the newsroom to discuss the matter. I approached it as a legal briefing, so I carried with me the charts showing The Browning Effect for the different crops.

What’s the Browning Effect? If you look at what NASS’ crop conditions do over time, you see the trend is for the numbers to decrease as the crop turns brown. In other words, as it matures naturally it doesn’t look as healthy as it does when it’s young and green.

I wish I was kidding, but I’m not. After showing the delegation these charts, the response was, “We aren’t the ones who tell people these reports are important.” And with that, the meeting ended abruptly.

Story No. 4

Along that same line of importance, at one of NASS’ User Meetings, the official social media account was posting comments made during one of the discussion sessions. One post will always stay with me, “We know there are problems with these reports, but we will continue to release them because they are popular.”

Think about that for a moment. The agency was admitting flaws with the system, calling into question any perceived value, but because they are “popular” the reports will continue to be released.

As I’ve said countless times, this is what makes this set of NASS nonsense the Kardashians of USDA reports. They have no value, add nothing of substance, but are popular.

What Can We Do?

• When we see folks blindly quoting planting progress (or whatever number) as X%, ask them “Of what?” How do you have a percent of something when you don’t know what that something is? Oddly enough, nobody has ever answered that question when I’ve posed it to them.

• When we see, hear or read a reporter/analyst/commentator start quoting this nonsense, turn them off. Or follow someone else. Get your ag-related news from a group that doesn’t start every piece with, “The market did this because USDA said that ... .” It’s difficult, but I know of some out there.

• If your broker/adviser happens to be one who has taken a public stance by saying, “I’m a big fan of NASS’ weekly reports ... ,” you might want to find someone else to do business with. The bottom line is if someone you trust with your money and positions is promoting completely made-up numbers, it isn’t good.

I know one of the responses to this piece will be, “But traders trade these numbers!” No, they don’t. I have talked to a number of investment firms, algorithm coders and so on in the industry and not one single time have I been told they even look at NASS’ numbers.

On the other hand, as the years have gone by I’ve heard more discussion and received more questions from those same groups on how to read national cash indexes, basis markets and futures spreads to better understand real market fundamentals.

But few in agriculture care about those things. Not while they can keep up with those who are keeping up with the Kardashians.