Statistics Canada’s crop production reports are falling short on accuracy and timeliness.
Larger than expected year-end crop stocks data recently forced the agency to revise its estimate of the 2015 canola crop up by 1.15 million tonnes to 18.38 million. Revisions are becoming an annual occurrence.
The stocks data, supplemented by the known export and domestic use numbers, keep showing that farmers must have grown more canola than was set out in the November production report.
The problem appears confined to canola. Spring wheat and durum production estimates in the November report are accurate.
Production reports are of a series where thousands of farmers are asked for the area, yield and production of their crops.
Production reports reflect conditions in July, September and November. The July report, based on a survey, is tentative because the crops are still growing. The September report is no longer based on a survey but rather a satellite monitoring system and model, called the Crop Condition Assessment Program.
The November report, based on a survey, is considered the final report, because harvest is usually complete. However, the agency says the report is subject to revision for two years.
Farmers could still be checking bins and measuring their production when the calls come for the November survey, so 100 percent accuracy can’t be guaranteed.
Even with combine yield monitors, many producers might be legitimately surprised by what is in their bins because often the latest crop genetics perform better than expected.
However, some producers might also think it is in their interest to under-report their canola production, hoping it will support prices. Canada dominates global canola trade, and what happens here affects prices. Our percentage of global wheat trade, on the other hand, is not dominant.
However, those who try to mislead the statisticians likely hurt only themselves.
The truth is eventually revealed in the stocks numbers, and the price eventually adjusts to reflect the truth.
In the meantime, farmers, processors, railways, grain handlers, exporters and buyers bump around in a clouded and misleading environment.
For example, would processors and exporters have been more aggressive in their marketing and contracting programs if they had known the crop was a million tonnes bigger then they thought?
Accurate, trustworthy supply and demand statistics are vital for crop markets, so it is important for Statistics Canada to review its system.
We don’t expect it to be perfect. Other agencies around the world regularly revise estimates and forecasts.
However, we do expect a striving for increased precision.
The further research and development of satellite monitoring and computer modeling will help set benchmarks to compare the accuracy of farmer survey data.
In-crop measurements are also needed to ground truth the remote sensing and survey data.
Recently, Statistics Canada’s head resigned, citing inadequate resources, lack of control and frustration with centralized government computer services.
The situation must be addressed to ensure the agency has the appropriate tools and resources to function up to the high standards it has shown until the last few years.