The USDA’s new export sales reporting system was taken down the same day it started on Aug. 25, and has been offline for nearly a week.
One of the country’s leading analysts of the commodities markets says the USDA’s software issue is having an impact on the grain and livestock markets.
“They tried to fix something that wasn’t broken,” says Arlan Suderman, Chief Commodities Economist with StoneX. He says the USDA’s Foreign Agricultural Service tried to launch their new Export Sales Reporting and Maintenance System last week. However, Suderman says that new system was taken down only after a few hours.
“The numbers didn’t look credible related to what we’ve been seeing in the way of sales in previous weeks in the daily flash numbers,” according to Suderman. “USDA later pulled those numbers, then they said that all export sales reports have been suspended, other than the daily flash reports, until further notice.”
He says the USDA decided not to put the old system back online when the new export reporting system was taken down.
“That leaves us really in the dark on what’s happening on the export front at a critical time of year when global supplies of grain and oilseeds are relatively tight. When there’s significant questions about the size of our crops and not a lot of wiggle room in the balance sheet, if we were to have a major customer like China come in and aggressively be buying, it might be able to do so under the dark at night, so to speak, and the market wouldn’t know about that until after the fact,” says Suderman.
He adds the export numbers from the USDA over the past week may not have been accurate either, which may a negative impact on commodity prices.
“The daily reporting flash notices are still in place and are reporting some sales, but those tend to miss many of the sales that are out there,” according to Suderman. “Right now, we’re kind of flying in the dark and what’s happening on the demand side as we worry about these crops getting smaller.”
Suderman thinks the USDA should consider putting the old export reporting software system back online.
“We kind of thought that maybe they’d go back to their old reporting system, which frankly we thought was very good and one of the best in the world I would say, but they haven’t yet done that and they’ve kind of left us in the dark about when we can anticipate seeing some type of improvement but, in the meantime, the old system sure looks good right now if we could just have it back,” he says.
Suderman tells Hoosier Ag Today that since the export reporting system has been offline, export sales to China and unknown destinations may have been underreported by the USDA by as much as 50 percent.
“Today, USDA’s Foreign Agricultural Service launched a new Export Sales Reporting and Maintenance System. This is the system through which U.S. exporters are required, by law, to report any sales transactions entered into with buyers outside the United States for a number of key commodities. The information collected through the system is aggregated and reported to the public each week by FAS.
“During today’s launch, FAS encountered challenges that affected the physical dissemination of the data as well as data quality. As a result, the agency has taken the system offline and is retracting the weekly export sales information disseminated earlier today.
“Data integrity, credibility, and transparency are top priorities for FAS, and the timely and accurate reporting of agricultural export sales data is vital to effectively functioning markets. FAS recognizes the disruption this situation has caused and is taking immediate steps to rectify it.
“Today’s issues occurred despite the measures taken over many months to transition exporters to the new system and to ensure the accuracy of the data reported. FAS leadership fully recognizes the impacts and is committed to resolving the current problems and keeping our stakeholders informed as we do so.”
UPDATE – After Hoosier Ag Today published the story, USDA Foreign Agricultural Service Administrator Daniel Whitley issued the following statement on Wednesday, Aug. 31 regarding weekly export sales reporting:
“As a result of unanticipated difficulties with the launch of the new Export Sales Reporting and Maintenance System, USDA’s Foreign Agricultural Service will temporarily revert to the legacy system while we work to fully resolve the issues with the new system. FAS will be unable to publish weekly export sales data on Thursday, Sept. 1 or Thursday, Sept. 8, but we expect to resume regular reporting on Thursday, Sept. 15.
“Since the system relies on data submissions by exporters, FAS is working closely with individual exporters to ensure that past, current, and future export sales data are accurate. Our staff will continue to conduct outreach and provide support to both data reporters and data users in anticipation of the re-launch of the new system.
“Data integrity, credibility, and transparency are top priorities for FAS. The timely and accurate reporting of agricultural export sales data is vital to effectively functioning markets. The new Export Sales Reporting and Maintenance System is designed to assure data security and availability. It will also provide a platform for future automations and enhancements that benefit both data reporters and data users.
“FAS recognizes the impacts of the problems that arose from this rollout. Despite the measures taken over many months to transition to the new system, we understand that further action is necessary to ensure credible and accurate data reporting. We are working to resolve the problems and are committed to keeping our stakeholders informed as we do so.
“Export sales reporting is a partnership between USDA and U.S. agricultural exporters and we recognize data integrity and data quality are interrelated. As FAS rolls out the new system, we look forward to strengthening our partnership with the exporter community to ensure overall compliance, accuracy, and functionality of the new system.”
Click BELOW to hear C.J. Miller’s news report on how problems with the USDA’s new export sales reporting system are impacting the grain markets.