State commodity pricing program expected to keep dollars local

Every state surrounding Indiana – including Ohio and Michigan – publishes daily commodity market reports. Because Indiana does not, members of the Indiana Beef Cattle Association and other farmers selling feeder calves in the state can’t time the sales on anything better than a good guess, said Joe Moore, IBCA executive vice president.

Because northeast Indiana farmers can check daily prices for the commodities in Ohio and Michigan, “you better believe they’re going across the border to sell,” Moore said.

During any given year, the information disparity drives between 80,000 and 100,000 head of Indiana cattle across its boarders for sale in neighboring states, he said. More of that money could be circulating longer in northeast Indiana’s economy.

“I think the profitability of people who make their living through agriculture always has an effect on small towns,” he said.

ISDA and USDA are still working out details of the reporting program, but ISDA spokesman Ben Kenney said legislation authorizing creation of a state-run market reporting system for Indiana was passed this past session in response to farmer requests.

At Purdue University, agricultural economist Chris Hurt said more information on prices helps markets work more efficiently, and better knowledge of prices helps promotes “fairness” in transactions.

Having prices reported by an unbiased party such as the USDA or the state also is “desirable compared to having private auction markets report what they decide to report,” he said.

The USDA historically had more price reporting of livestock in Indiana, but its budget no longer allows it to continue such reports in many of the smaller production states, and on smaller commodities.

But, accurate and unbiased reporting of prices improves production efficiency, and enables consumers to get the most for the money they spend, Hurt said.

“Prices are critically needed in markets to send signals to both producers when they are deciding what and how much to produce and to consumers when they are deciding what to purchase,” he said.

Once the program is implemented, ISDA will monitor several livestock and forage auctions in Indiana and post weekly market values to an ISDA website.

The site will enable producers “to compare market prices as reported by a non-biased source using a system that standardizes pricing based on animal quality,” the agency said in a statement. “Producers would then choose the market that best fits their needs and provides them the best value for their product.”

The site is likely to include information from at least three auctions in the northern half of the state and the same number from the southern half, according to talks the cattle association has had with ISDA.

Shipshewana Auction, in LaGrange County, provides its weekly livestock auction results to interested publications and on its website. Owner Keith Lambright said he believes the results can be of temporary use to buyers and sellers.

But, Lambright questions how long the results would provide value because commodity prices can quickly change, he said. Between 1,000 and 1,200 head of livestock are sold at the Shipshewana auction each year and it is among the state’s largest.

Moore believes the market reporting system will benefit from the fact that not all of the auctions it will track take place on the same day each week. A single website will add convenience for those tracking auction results from throughout the state.

ISDA was authorized to run the market reporting system as a two-year pilot program that would start this year. If things go as well as expected with the program, it could be expanded in 2017.