I Know Something You Don’t Know

[field date] | Letters

Author: Nicole Olynk Widmar, Associate Head and Professor, Purdue University, Department of Agricultural Economics

We are all about data, including non-traditional sources of data, here on Consumer Corner. We recently summarized a favorite piece from 2020, Why Revered Rodents Wear Gloves, for the Purdue Ag Econ Keep Track 2021 Newsletter (see page 11), fundamentally culminating with the idea that, “Transparency and honesty are good … but forcing consumers to confront uncomfortable truths is essentially ripping off Mickey’s gloves to reveal the rodent paws underneath. If consumers are asking questions, providing truthful information about agricultural production is the right response; however, be sensitive to the fact that what we share could be perceived negatively by others. Answer the call for transparency, but don’t rip off Mickey’s gloves without warning.”

Indeed, caution may be warranted in how we respond to requests for information from consumers, or how we may wish to forcibly provide information not requested; however, more fundamental market information and data in food and agricultural industries has generally been considered public data in the United States. In an article in Choices Magazine entitled, “Big Data Provides Insights to Public Perceptions of USDA”, I outlined how information asymmetries are a near universally accepted contributing factor towards market failures and documented the roles of public information from the United States Department of Agriculture and associated agencies in having built and sustained the U.S. agricultural and food markets into what they are today.

From Big Data Provides Insights to Public Perceptions of USDA by N. Widmar

Citation: Widmar, N.O. 2019. ““Big Data” Provides Insights to Public Perceptions of USDA.” Choices. Quarter 4. Available online: http://www.choicesmagazine.org/choices-magazine/submitted-articles/big-data-provides-insights-to-public-perceptions-of-usda

 Information asymmetries are a (near) universally accepted contributing factor of market failures. Research in agricultural and applied economics about information asymmetry is plentiful, ranging from the role of traceability systems in food markets (Hobbs, 2004) to vertical integration in food industries (Hennessy, 1996). A historical cornerstone of U.S. agriculture is the attempt to lessen or alleviate the impacts of information asymmetries by creating “public good” information sources. The U.S. Department of Agriculture (USDA) provides leadership on food, agriculture, natural resources, rural development, nutrition, and related issues based on public policy, the best available science, and effective management (USDA, 2019a). The USDA self-proclaims,

We have a vision to provide economic opportunity through innovation, helping rural America to thrive; to promote agriculture production that better nourishes Americans while also helping feed others throughout the world; and to preserve our Nation’s natural resources through conservation, restored forests, improved watersheds, and healthy private working lands.

The USDA and its affiliated agencies provide data and reporting that is universally accessible and employed by firms, farms, and agencies to make decisions. The National Institute of Food and Agriculture (NIFA) is federal agency within the USDA that is part of USDA’s Research, Education, and Economics (REE) mission area (USDA, 2019d). The mission of the USDA’s Economic Research Service (ERS) is “to anticipate trends and emerging issues in agriculture, food, the environment, and rural America and to conduct high-quality, objective economic research to inform and enhance public and private decision making” (USDA, 2019b). The USDA’s National Agricultural Statistics Service (NASS) conducts surveys every year to inform reports on virtually every aspect of U.S. agriculture (USDA, 2019c). Production, price, market, labor, finance, and agri-supply chain data (including on-farm labor and wages) are some examples of data and reporting by NASS, which “report[s] the facts on American agriculture, facts needed by people working in and depending upon U.S. agriculture” and “provide[s] objective and unbiased statistics on a preannounced schedule that is fair and impartial to all market participants,” among other endeavors (USDA, 2019c).

 The sheer volume of media following a much-anticipated USDA report release is evidence of the importance of this information in the marketplace. Correspondents and market analysts need not agree with the information provided; entire publications exist to debate the USDA’s reports and/or predictions. Nonetheless, even those who offer counterarguments and commentary would not be able to do so without a public information source to comment on or disagree with. In most cases, only the largest or best-funded companies would be able to acquire data and analytics; the USDA puts this information into the public domain. The precise estimates provided in news releases/reports aside, the fundamental value of public information from the USDA and associated agencies is a cornerstone of U.S. agriculture and food markets.

 U.S. Secretary of Agriculture Sonny Perdue announced on August 9, 2018, that further reorganization of the USDA was to take place (USDA, 2018). The ERS, which was under the REE mission area, was to realign with the Office of the Chief Economist (OCE) under the Office of the Secretary, and most employees of the ERS and NIFA were to be relocated outside the Washington, DC, region. Movement of employees and the agency was expected to be completed by the end of December 2019. The relocation fueled a national argument, with 294 of 315 NIFA staff and 253 of 329 ERS staff told to uproot and move or leave (Bach, 2019).”

While it seems that 2022 will see continued challenges in public policy surrounding the ongoing (and worsening) pandemic, we also anticipate uncertainty in agricultural trade relationships, antitrust debates heightening in meat markets, and all of the ‘normal’ discussions about costs of production, weather, etc. in our agricultural and food markets. Correspondents may argue and market specialists will continue to disagree, but the fact that we have data and market summaries to disagree with and argue about is incredibly valuable. In a world where we continue to struggle to find any consensus, let’s ensure that we’re valuing the public data in agricultural and food markets that enables our agricultural businesses to move forward. And remember, Progress Does Not Require Consensus , which is good because I don’t see consensus on the horizon, but our agricultural industries have gotten quite adept at progress in an uncertain environment. As we start 2022, it’s worth remembering what we learned at the end of 2020 Trying to Help When, Where, and How We’re Able:

 “When I was a little boy and something bad happened in the news, my mother would tell me to look for the helpers. You’ll always find people helping, she’d say. And I’ve found that that’s true. In fact, it’s one of the best things about our wonderful world.”
By Fred Rogers; https://www.misterrogers.org/videos/look-for-the-helpers/