|
We are supposed to be living in the information age, yet this week’s headlines make me feel more like I am living in a cross between The Matrix and The Twilight Zone. Let’s set the stage. There are two stories of interest related to the protein industry, with the USDA smack in the middle.
Walmart cutting prices
On July 6th, Walmart announced it would cut prices on seasonal items for the summer. Most notably, ground beef was being slashed by 12%. President Trump preempted the announcement on social media, claiming the price drops were at his administration’s request to celebrate the nation’s 250th birthday. At face value, this is great news that should be celebrated. Consumers are getting some relief at a time when affordability continues to strain household budgets. However, I have a few questions:
The timing feels curious. This announcement came after the July 4th holiday, when the money was already spent on cookouts and celebrations. Why wasn’t this pressure on retailers applied earlier so all Americans could participate in the celebration?
The USDA and US Department of Justice launched antitrust investigations into beef processors months ago amid high beef prices. Since retailers have the ultimate control over the price a consumer pays, and can now afford to drop prices so significantly, why aren’t they being investigated by the DOJ?
USDA Export Data Confusion
USDA reported beef exports increased by 800% at the end of June. Japan alone showed an increase of more than 500%.
Reuters shared a statement from USDA claiming, “Unfortunately, there was a misunderstanding on the reporting requirement, and the sales and exports were held for several reports before being reported.”
Industry analysts are more confused by the response than by the original error. Many feel that the numbers reported are kilograms shipped instead of metric tons. Either way, economically important information that markets trade on and buyers build strategies around is being called into question.
Are the effects of the widespread gutting of federal agencies by Elon Musk’s DOGE efforts early in the current administration’s term starting to manifest in economic reporting? Is this a sign of poor succession planning and a generation of younger workers who have minimal institutional knowledge? Or was this simply a one-off mistake? Time will tell, but in a multitrillion-dollar industry, information matters.
As a self-described data geek, I cannot overstate the value of information in the decision-making process. Commodity markets swing on headlines, crop forecasts, weather reports, and all manner of government reporting. Risk lies everywhere in this industry. Companies make important decisions every day, and the line between a profitable call and a disastrous one is razor-thin. We cannot allow every aspect of society to become a Kalshi bet. There is too much at stake. While there is no such thing as perfect information, markets operate on accurate information, not misinformation, disinformation, or outright false information. Without that, we really are all living in the Matrix.
|