June 3, 2008
For years law has prohibited USDA from projecting cotton prices. One string of logic was that some cotton interests thought USDA economists projecting prices could have adverse price distorting impacts on the market. USDA has been projecting prices for other commodities for years.
One of USDA's most useful reports is the monthly World Agricultural Supply and Demand estimates. In the WASDE teams of economists and statisticians from USDA's World Agricultural Outlook Board prepare estimates of beginning stocks, production, imports, total supplies, consumption, exports, total use and ending stocks for major commodities. The World Board makes these projections for both the United States and the world.
Historically, each WASDE has contained USDA's best price projections for the coming year for all commodities except cotton.
Section 1610 of the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) eliminated the longstanding prohibition on USDA’s publishing of cotton price forecasts. Therefore, the June 10 WASDE report will forecast the average price received by farmers for U.S. upland cotton for the 2007/08 and 2008/09 marketing years. The price forecast for 2008/09 will be presented in a range format.
The change means cotton growers will now have access to USDA's best thinking on what cotton prices will be. Those price forecasts provide one more piece of information growers can use to make cotton marketing decisions.
With cotton prices lagging the surge in prices for most other row crops, the change to provide cotton growers with USDA's most up to date forecasts could not have come along at a better time.
Suppose Uncle Sam gets serious about balancing the budget. Also suppose the budget crunch would result in USDA only being able to compile one report per month. I'd vote for that report to be the WASDE. Why? Generating the WASDE requires a plethora of data currently generated by USDA's National Agricultural Statistics Service and USDA's Agricultural Marketing Service and published in numerous other reports plus a considerable amount of number crunching by USDA's Economic Research Service.
The WASDE provides growers with information from several dozen sources all in one place and presented in an easy to understand format. The World Board could not construct the WASDE without those other reports, or at least the data contained in them.
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