Corn controversy | Survey of corn stocks subject to scrutiny
CHICAGO, Ill. (Reuters) — The U.S. Department of Agriculture has commissioned a study of its estimate of U.S. stockpiles of corn to address widespread concerns about the accuracy of the bellwether quarterly report.
“The presumption from a lot of people is the survey is wrong,” said USDA chief economist Joseph Glauber.
“I have a project ongoing right now looking at that issue. I contracted out some work.”
The study focuses on why trade expectations have diverged so much from USDA’s reported data, Glauber said.
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He acknowledged that grain industry complaints of an inaccurate count for the largest U.S. crop had persisted for the last couple of years.
However, he expressed confidence that USDA was doing its best to track stockpiles in a rapidly changing corn marketplace, where ever more grain is being held off the farm and less subject to the department’s farmer surveys.
Disconnects between trade expectations and USDA stock estimates have occurred off and on historically, but the frequency has increased in recent years, analysts say. Since March 2010, 12 of the past 14 quarterly corn stocks figures have been well out of sync with private estimates, generating huge price swings in Chicago Board of Trade corn futures markets.
“When NASS (the USDA’s National Agricultural Statistics Service) does its survey, they essentially do a census of all the commercial operations,” Glauber said.
“So you would think with more grain being held off-farm, those numbers should be even better. Whereas on the farm they do it by survey, so there are some inherent sampling errors. But there’s been a lot of theories why those expectations vary.”
He wasn’t sure if the study will find answers.
“What I’ve been looking at is trade expectations relative to the reports,” said Glauber, adding there have been surprises between expectations and the actual numbers.
“There’s no question that a lot has changed in the corn market over the last five to six years. Ethanol is now a major factor. Trying to estimate feed use is difficult. We know corn for feed has declined, while distillers dried grain have come in. That’s one issue.”
