* Government suspends key reports during shutdown
* Tyson Foods to use Urner Barry data while USDA is closed
* Private data cannot fully replace U.S. data -traders
By Tom Polansek
CHICAGO, Oct 4 When the U.S. Department of
Agriculture went dark this week due to the partial government
shutdown, phones lit up at commodities firm Urner Barry.
The USDA typically provides quotes on beef, pork and chicken
prices, but 156-year-old New Jersey-based Urner Barry quickly
became the go-to source for livestock traders searching for
"It's certainly been more active around here," said Jim
Kenny, director of business development for the firm.
Urner Barry is not alone. The shutdown has elevated the
profiles of companies that sell data similar to that which the
government normally provides and boosted their subscriber lists.
Market participants are scrambling to find reliable sources
for information that can make a difference between profit and
loss as they bring corn, beans, or cattle to market.
The shutdown is shedding light on the quality of
privately-produced data and giving some providers a chance to
position themselves as substitutes for the taxpayer-financed
The phenomenon has affected more than just the commodities
sector. Financial markets, which rely on government reports
including unemployment, were adjusting to a constrained
information flow this week. The shortfall put the investor
spotlight on vendors such as Automatic Data Processing, which
produces a private-sector version of the Bureau of Labor
Statistics' monthly jobs report.
The Labor Department on Thursday delayed its employment
report for September due to the shutdown and said a new release
date had not yet been set.
The agricultural markets stand alone, though, in their
reliance on a steady stream of government data, some of it
published on a daily basis. Daily USDA market reports are used
by meat packers to determine how much they pay livestock
producers for their cattle and hogs. They are among thousands of
government reports issued in varying frequencies, among them
estimates on planted crops, estimated yields, harvested acres
and livestock being fattened for slaughter.
Agencies suspended many of their data releases after the
shutdown began on Tuesday when lawmakers failed to settle a
dispute in which Republicans are demanding the dismantling of
President Barack Obama's signature healthcare law.
Thursday came and went without previously scheduled USDA
data on weekly export sales, and the U.S. Commodity Futures
Trading Commission did not issue weekly data on Friday detailing
positions held in commodity markets.
The companies stepping into the government data void tout
vast reservoirs of pricing information and industry contacts as
selling points for their services. However accomplished they may
be, none are considered as definitive as the government reports.
The U.S. Grains Council, which promotes U.S. grain exports,
follows private data from firms like Informa Economics and Pro
Exporter even under normal conditions as a way to stay on top of
crop production forecasts. There is still no substitute for the
breadth and depth of USDA data, said Thomas Sleight, president
of the council.
Food companies and grain traders are coming to terms with
the fact that the shutdown will likely delay the release of key
USDA report scheduled for Oct. 11, which was set to detail crop
production and supply and demand numbers.
Creation of the report, which affects prices of grains and
other agricultural commodities around the world, starts at the
farm level with USDA workers taking two full weeks to survey
growers and inspect crops in thousands of fields.
"We have to always recognize the efforts and assets that
they (USDA) apply to this question," Sleight said about the size
of the U.S. harvest. "That's going to be hard to replicate."
The Oct. 11 report was considered key because foreign grain
buyers are eager to learn the size of the 2013 U.S. corn harvest
after a devastating drought slashed output last year, he said. A
wet spring in 2013 delayed planting in many areas, pushing back
the start of the harvest and keeping the crop's size uncertain.
Private data, including reports on crop yields around the
country, can fill the government void somewhat, said Bill
Tierney, chief economist for AgResource Company and a former
USDA grains economist.
Tierney compared the experience of relying solely on private
agricultural data to trying to cross a room filled with
furniture. "Without the USDA, you've turned down the
illumination considerably, but you're not in the dark," he said.
Some private forecasters are limited in their ability to
take advantage of the government shutdown because they rely on
USDA data as a key source for their databases.
Crop forecaster Lanworth typically uses satellite services
provided by the U.S. government to estimate crop production
around the world.
With U.S. data feeds interrupted, Lanworth this week began
using European weather outlooks and satellite data, President
Nick Kouchoukos said. European data is comparable to U.S. data
in scope and quality, but U.S. data is Lanworth's standard. The
shift from one to another is time consuming because it
introduces another set of data into the firm's modeling, he
"We have been profoundly affected just in terms of
efficiency and standards," Kouchoukos said about the shutdown.
"We like every one else are eager to get our regular data back."
Lanworth is a brand of Thomson Reuters Commodities Research
SEEKING AN EDGE
In the livestock sector, top U.S. meat packer Tyson Foods
Inc said it plans to start using Urner Barry hog data to
determine prices on Monday because USDA figures are unavailable.
A competing information provider, Cattle Fax, expects an
increase in demand for its reports on the beef industry if the
shutdown persists, senior market analyst Kevin Good said. The
member-owned organization, formed by cattlemen in 1968, claims
to have the largest private database of beef data in the
"Service providers like Urner Barry and Cattle Fax are both
having a hay day with the government shutdown," said Shane
Johnson, a marketing consultant for brokerage Hurley and
Associates, in a note to clients on Friday. "At least somebody's