Not many products have a best-before date three-and-a-half weeks in the past.
But that might be an appropriate label for Statistics Canada’s annual pre-harvest crop estimate.
Take the report released Aug. 28
The numbers in that report are based on information gathered by the agency during the week ending Aug. 4.
Since then, crop yields shriveled under unrelenting hot, dry weather across much of the grain belt.
As far as one grain broker is concerned, that makes the StatsCan numbers pretty much irrelevant.
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Even worse, says Larry Weber, prices for some commodities dropped as a direct result of the StatsCan report, potentially taking dollars out of farmers’ pockets.
“In the first three days, they just tanked,” Weber said in an interview from his Saskatoon office, with edible peas dropping by 50 cents a bushel and canola falling $2.70 a tonne.
A StatsCan official said the report clearly states when the information was gathered, and it’s a case of user beware.
“We make it clear that this is preliminary data,” said David Burroughs, head of the agency’s crop reporting unit.
“We cannot take responsibility for what people do with it.”
The Aug. 28 report projected a 5.1 million tonne canola crop and a 2.4 million tonne pea crop. Weber said most analysts are now expecting canola production of 4.2 to 4.5 million tonnes and pea output of 1.9 to 2.1 million.
Canadian analysts are well aware of the real situation, said Weber, but many foreign customers rely on the StatsCan numbers.
“Since that report was released … I’ve had international clients call and say, ‘There’s no problem with your crop,’ ” he said.
“They’ll trust government numbers more than private analysts. Those are the numbers they’re plugging into their supply and demand tables.”
However, one market analyst said he doesn’t think the StatsCan numbers have much of an impact on prices.
“The StatsCan report’s lifespan on the floor of the (Winnipeg Commodity) Exchange is probably five to 10 minutes,” said Charlie Pearson of Alberta Agriculture.
He said grain traders and merchants have a responsibility to keep their customers fully informed, using all available sources of market intelligence.
“My experience is foreign buyers utilize a variety of sources of information, not just StatsCan,” said Pearson, who has also worked for a private grain company and the Canadian Wheat Board.
He uses the agency’s July 31 estimate as a highly credible starting point from which he can make adjustments using his knowledge of changes in crop conditions since the survey was done.
“If I didn’t have that, I’m just shooting in the dark,” he said.
“With the StatsCan survey, I have a base that I can make some evaluations from.”
Weber said the United States Department of Agriculture gets its August crop production survey out much faster.
In fact, the USDA’s Aug. 10 production report was based on information gathered up to Aug. 6.
Burroughs said the agency has tried to speed up the process, but isn’t willing to sacrifice accuracy for timeliness.
The report is based on telephone interviews with 17,000 farmers, carried out over seven to 10 days. The survey is designed to provide a crop estimate and an estimate of on-farm grain stocks as of July 31.
The data is cleaned up and edited, then subjected to a rigorous analysis, including consultations with other federal departments and provincial crop agencies. The publication process takes another three to four days. All told, the process takes two-and-a-half to three weeks.
