Plains People Trading & Consulting

Predictive Market Consultant

Moses

“The Spread King”

Accurate, timely data is the backbone of agricultural markets. Reports like the USDA’s Cattle on Feed (COF) survey guide billions of dollars in trading decisions, influence feedlot placements, and shape risk management strategies. But when USDA programs are short-staffed, the integrity of these reports suffers—creating ripple effects that harm producers, traders, and consumers alike.

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The Staffing Crisis

In recent years, USDA has faced severe workforce reductions, particularly in the National Agricultural Statistics Service (NASS) and Farm Service Agency (FSA). These agencies are responsible for collecting and verifying data that underpins reports such as COF, WASDE, and Crop Progress.

• Field offices closed or consolidated due to budget constraints and retirements.
• Survey response rates dropped, reducing the reliability of estimates.
• Quality control weakened, as fewer staff are available to validate data before publication.

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Why Reports Like Cattle on Feed Matter

The COF report tracks cattle inventories in feedlots and is a key indicator for beef supply trends. Futures markets, packers, and feedlot operators rely on this data to make pricing and operational decisions. When the report is inaccurate or delayed:

• Futures prices can swing sharply based on flawed assumptions.
• Producers may make costly decisions—such as retaining or selling cattle—based on misleading signals.

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Market Manipulation Through Data Gaps

When USDA reports lose credibility, markets become vulnerable to speculation and manipulation:

• Algorithmic traders exploit volatility caused by unexpected or inaccurate data releases.
• Insiders with better private data gain an unfair advantage over producers who depend on public reports.
• Basis risk increases, making hedging strategies less effective and raising costs for farmers.

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Real-World Consequences

• Price Volatility: Erratic futures movements harm both buyers and sellers.
• Operational Missteps: Feedlot placements and heifer retention decisions become guesswork.
• Loss of Trust: Market participants question USDA data, undermining confidence in the entire pricing system.

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The Vicious Cycle

1. Staffing cuts reduce survey capacity.
2. Reports are delayed or less accurate.
3. Market volatility spikes after flawed releases.
4. Producers lose faith in official data.
5. Risk and inefficiency compound across the supply chain.

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Solutions

• Restore USDA staffing, especially in NASS and FSA field offices.
• Prioritize critical reports like COF and WASDE during budget negotiations and shutdowns.
• Invest in technology—satellite imagery, digital surveys—to supplement human data collection.

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Conclusion

Short-staffed USDA programs don’t just inconvenience bureaucrats—they destabilize markets. When reports like Cattle on Feed fail to deliver accurate, timely data, the result is distorted pricing, increased risk, and diminished trust. Rebuilding USDA’s capacity is essential to protect farmers, ensure fair markets, and maintain the integrity of America’s agricultural economy.