Getting a Point of Reference
April 1, 2014
Following a presentation I made to Indiana and Kentucky dealers in Louisville several weeks ago, I was asked by a dealer attending the session how much confidence did I have in monthly reports from the U.S. Dept. of Agriculture. I quickly responded, “Not a lot.”
In retrospect, I think I responded too quickly. Later that evening, I spoke with the dealer who had asked the question and apologized for my offhand response. I told him what I should have said is, what USDA data does is to provide a “point of reference.”
The fact of the matter is for many of us involved in agriculture, the data coming from USDA is the only ongoing game in town. It provides information we use as a base to build trend lines and forecasts. It provides historical data on which we compare current information and lay a foundation for a lot of our business decisions.
It occurred to me after giving my off-the-cuff comment that we (I in this case) often dismiss information that we don’t pay for directly as having little value. We all know we are indeed paying for it, but we’re not writing USDA a check for any specific service.
This also made me wonder how farm equipment dealers view information they receive from USDA. So, in our last Dealer View survey we asked and 179 dealers responded. Specifically, we asked dealers “How important are monthly USDA reports (crop production, crop progress, ending stocks, crop prices, etc.) to your dealership business?”
I don’t know if I was surprised or not by the response. Nearly 71% of the dealers who answered the survey said the USDA reports are either “very important” or “somewhat important” to their business. Only 10.6% indicated that the USDA data has little or no value to them.
Specifically, it broke out this way:
|– Very important; we pay close attention||39.1%|
|– Somewhat important; we pay some attention||31.8%|
|– Somewhat interesting; more for curiosity and conversation||18.5%|
|– Not important; we pay little attention||6.7%|
|– Of no value; we tend to ignore||3.9%|
As I’ve often said in the past and repeating here, to give it real value, the information that USDA and others provide, including Farm Equipment, should be used as a baseline and then put into context of what’s going on in your specific region and your specific customer base.
Of course the data provided by USDA has value and, yes, I do have confidence in much, if not most of it. So I offer my apologies again for my glib response. At the same time, I wouldn’t suggest using such information in a vacuum for making important decisions.