NFU: USDA Reports Should be Released When Markets are Closed

13 07 2012

WASHINGTON (July 12, 2012) – National Farmers Union (NFU) President Roger Johnson submitted comments today to the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service (NASS) urging the agency to release critical reports such as the monthly “Agricultural Prices” when markets are closed.

“We believe that those using agricultural commodity markets, especially bona fide hedgers and end-users of commodities, would be best served if those markets were not open when the NASS critical reports were released,” said Johnson. “Whether the report releases occur outside of regular trading hours or during a pause in trading of one hour or more is at the discretion of USDA, but it stands to reason that it is beneficial for market participants to be able to read and analyze the reports before trading resumes. There are additional concerns that it may be difficult for some in rural areas to download the reports in time to react quickly when the markets are open, which underscores the need for a release time outside of trading hours.”

In the first half of 2012, trading hours extended to more than 20 hours per day at both the Chicago Mercantile Exchange and the Intercontinental Exchange. This change prompted the need to reexamine report release times and consider the effect of those reports on the commodity markets.

“NFU is also concerned by the ongoing shift in focus of commodity exchanges that has forced USDA to alter the report release schedule,” said Johnson. “Over time, and especially in recent years, commodity markets have shifted emphasis from managing the inherent risks of farming and business to the influx of speculators and index funds. Speculators are now thought to account for 85 percent of commodity market activity, which is far more than the 15 percent needed to maintain liquidity. It is unfortunate that federal agencies are now forced to act to conform to the needs of speculation rather than to the needs of the farmers and businesses using their products – the ostensible reason for these markets to exist in the first place.”

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