Minnesota farmers await important corn count estimate
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The U.S. Agriculture Department on Thursday will unveil its estimate of just how much corn, soybeans, wheat and other crops the nation's farmers will produce this year -- a key figure for Minnesota farmers.
The government forecast on the output of tens of millions of acres of farmland can move billions of dollars in grain markets. Farmers across the state are awaiting the estimate, an important factor in determining food prices around the world.
To understand how the USDA comes up with its crop estimates, it's helpful to think big.
Take corn for example. Imagine if all the corn fields in the nation were stitched together into one giant patch. All together, this field would be some 89 million acres, about the size of Minnesota and Iowa combined.
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Agriculture Department workers help come up with the estimate by heading to individual fields.
The start of the enormous undertaking looks about as sophisticated as following an old pirate map.
"We go in 75 rows, and then we turn south and we start counting out 360 paces," said USDA worker Diane Dick on a recent outing.
"These crop production reports are of immense importance."
Dick, of Mountain Lake, is one of the hundreds of enumerators who walk into corn fields all across the nation to sample the crop.
In a field near the town of Kiester in southern Minnesota, the number of rows and the number of paces she walks are chosen at random by a computer. It insures that enumerators travel beyond field edges to sample all types of terrains and soils. It's no easy stroll. The corn leaves scratch and cut.
"We had a guy who had got an infection in his eyelid from being cut by a corn leaf," Dick said.
After the assigned number of steps, Dick arrives in a section of the corn field indistinguishable from the rest of the rows. The corn plants tower over her head. Using a tape measure, she carefully identifies two 15-foot-long rows of corn stalks. Then she counts the ears and ears-to-be.
"One, two, three, four -- and here's a silked earshoot way down in here -- five," she said.
The ear count is a key step in measuring just how productive the nation's corn fields are. All together, Dick and the other enumerators will sample more than 3,000 rows of corn across the country. That sounds like a lot, but put together it's less than five acres nationwide. In other words, less than one ten-millionth of the total corn acreage.
Analysts pore over the data as it's forwarded to state offices, and finally to headquarters in Washington. There, in an all-night session leading up to release day, the crop forecast numbers are finalized -- all under the watchful eyes of armed guards.
"Job one is security," said Joe Prusacki, director of the Agriculture Department's statistics division.
Prusacki said the statisticians are deliberately cut off from the outside world for about 10 hours as they analyze the data. He said that's because the corn production numbers are powerful information that can cause large price swings in the grain market.
"If someone has a cell phone, someone has a Blackberry, someone has a laptop and they know what the corn yield is going to be ... if that corn yield is different from what the market expectation is, somebody could make some money," Prusacki said.
That actually happened 105 years ago. An Agriculture Department employee and a cotton trader devised a messaging system to transmit crop information before it was publicly released. The signal -- window shades. The employee set the blinds in a USDA office at a predetermined height to leak the information.
When the corruption was discovered, agricultural officials instituted the strict security measures still followed today.
"These crop production reports are of immense importance," said Darrel Good, a University of Illinois agricultural economist.
Good said grain prices respond quickly to the crop estimate.
"I think that tells you that the market respects those numbers, and everybody's expectations have to adjust to the USDA once they come out with their figures," he said.
Historically, the federal crop estimates are the best available, said Good, who studied USDA crop estimates over a 36-year period, from 1970-2005.
Good said the department's August estimate for corn tends to be the furthest off from final harvest figures. That's because the crop is still growing and could get better or worse before combining begins.
The result of this year's corn count and other crop forecasts comes out Thursday morning.
