Informationthe Keyto Efficient Market Function

Agrometeorological risk and uncertainty permeate the entire marketing system with far-reaching consequences for market participants. In order to optimize business decisions relative to these risks and uncertainties for every economic agent within the global agricultural production and distribution system, accurate, timely, consistent, and widely available information is essential, ttis information requirement can be met in part through periodic review and estimation of global supply and demand for agricultural commodities, tte quality and usefulness of such estimation is contingent upon many factors, the single most important of which is accurate and timely assessment of crop production.

It was the recognition of the need for such information about crop production that led to the creation of the World Agricultural Outlook Board (WAOB) within the United States Department of Agriculture, tte WAOB was established to provide a reliable source of timely, consistently reported, and widely available market information, tte WAOB, with a staff of about 30 economists and meteorologists serves as USDA's focal point for agricultural market intelligence. Under WAOB direction, interagency committees of experts develop official forecasts of supply, demand, and prices for major agricultural commodities. Parallel to its commodity forecasting roll, WAOB's Joint Agricultural Weather Facility (JAWF) coordinates weather, climate, and remote sensing work among USDA agencies. In addition, and in support of its commodity supply and demand forecasting function, JAWF has operational responsibility for monitoring and analyzing the impact of global weather on agriculture, ttis activity is conducted jointly by WAOB/JAWF and the National Weather Service of the Department of Commerce.

A primary focus of public interest is the monthly publication of a report entitled, World Agricultural Supply and Demand Estimates (WASDE). Its forecasts cover major commodities for the United States and the world and are considered authoritative because they are backed by USDA's unparalleled access to information.

A unique feature of the USDA's system for estimating monthly global supply and demand is the information provided by JAWF. On a daily basis, meteorologists track global weather developments and interpret the impact on crops in the world's major farming regions, ttis information is presented to USDA analysts and frequently forms the basis for monthly adjustments to global supply and demand estimates. By combining sophisticated technology and a scientific understanding of crop phenology, JAWF is able to provide early warning of emerging weather problems and potential crop shortfalls even in remote regions of the world, ttis type of analysis, in conjunction with economic analysis of agricultural markets, helps permit USDA to meet the critical market need for timely and consistent information.

In the next section, a brief overview is presented of several of the meteorological tools and methods of crop assessment typically applied in developing the monthly world agricultural supply and demand estimates at USDA. Examples are taken from analyses presented by JAWF to the Interagency Committee economists as part of the monthly process of estimating global commodity supply and demand.

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