Trump ends early media access to USDA reports
The Trump administration announced today that it will end the government’s more than a century-old practice of granting key media organizations access to Agriculture Department crop and livestock reports before the general public so that reporters may analyze the reports and release their analyses at the same time.
Agriculture Secretary Sonny Perdue said the administration had decided to give the media access to the reports at the same time as the general public beginning August 1. In recent years, reporters have been allowed access to the reports at 10:30 a.m. Eastern time, 90 minutes before they are published at noon.
“These reports are greatly anticipated each time they are released, and they can have significant market impacts,” Perdue said in a news release.
“Everyone who has interest in the USDA reports should have the same access as anyone else. Modern technology and current trading tactics have made microseconds a factor. This change addresses the ‘head start’ of a few microseconds that can amount to a market advantage. The new procedures will level the playing field and make the issuance of the reports fair to everyone involved.”
In its news release, USDA said “It takes USDA data roughly 2 seconds to be transmitted and posted for the public to read. Meanwhile, press organizations have access to high-speed fiber optic lines out of the USDA lockup and advertise paid services to clients that offer ‘ultra-low latency’ data transmission speed. They have approximately 90 minutes to distill the reports down to their clients’ needs.”
“There is evidence to suggest that there is significant trading activity worth millions of dollars that occurs in the one- to two-second period immediately following 12:00 p.m., which could not be based on the public reading of USDA data,” USDA said. “The inference is that private agents are paying the news agencies for faster data transmission to get a jump on the market.”
Perdue portrayed the change as providing “equal access to all” and said “USDA is requiring the media to participate in lockup in the same way as the public. Media will no longer receive the reports in advance nor can they utilize high-speed transmission cables from within USDA’s lockup facility.”
Six news services participate in lockup and are given pre-access to reports: Associated Press, Dow Jones/Wall Street Journal, Thompson Reuters, Market News International/Deutsche Boerse, Bloomberg News, and DTN/Progressive Farmer.
USDA officials informed reporters who cover the lockup in a telephone call earlier today that the last lockup they will be allowed to cover is this Thursday.
A reporter on the call said that high-frequency trading within two seconds after the release of the data could not be attributed to news organizations because their reports do go out that fast. The decision not to allow early access to the reports will make analysis more difficult, but media executives are still evaluating the situation, the reporter said.
USDA said the change was “prompted by inquiries from the public” and that “USDA examined the procedures and determined that technological advancements have afforded recipients of customized media reports a market advantage not enjoyed by members of the general public. The USDA also sought analytical assistance from the Commodity Futures Trading Commission to help inform a policy update to the lockup procedures.”
The lockup and the release of the reports is one of the basic and storied functions of the Agriculture Department.
Following a case of insider trading in 1904, security procedures have been tight. In recent years no electronic transmission devices are permitted into lockup (such as cellular telephones) and once people enter the lockup they cannot leave until the reports are sent out to the public at noon.
–The Hagstrom Report