At 3 a.m. Monday, federal officials will review intelligence so sensitive they must first surrender their laptops and cell phones to a security guard, severing all access to a curious world outside their sealed room.
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Are they tracking terrorists? No. Do they know about nuclear weapons in North Korea? Definitely not. These officials work for the Agriculture Department. They will finalize their estimates of how many acres of corn, wheat, cotton, oats, barley and soybeans farmers will plant this year.

With crops at near-record prices and grocery bills rising, the agricultural industry is awaiting the Monday report with bated breath because it will give the best initial glimpse of the nation's food supplies, and thus represents an early sign of where commodity prices might go.

Markets erratic

These annual figures carry an added weight because the last two years have transformed the once-calm agricultural markets into tempests, where prices can swerve more in a day than they once did in several months.

Droughts that decimated global wheat harvests, corn that doubles as ethanol and a global economic boom all have exposed food to high levels of inflation.

"We're all trying to get inside the heads of agriculture producers and trying to anticipate what their cropping mix will be," said Don Frahm, who has 30 years' experience analyzing agribusiness for Memphis-based Informa Economics.

"I've been in this business long enough to know there will almost certainly be some surprises," he said.

Depending on whether futures markets correctly predicted the report's contents, commodity prices could surge to new highs or spiral into a tailspin.

The Agriculture Department's planting survey asks 84,000 producers their intentions, using mail questionnaires, phone follow-ups and personal interviews during the course of two weeks. State field offices then examine the data for about five days, checking for any outliers that might skew results. The Agriculture Department then reviews the survey for another five days before assembling a final draft in lock-up during the wee hours of the morning. It gets released at 7:30 p.m. CDT Monday.

Historical high jinks

The extreme secrecy surrounding agricultural reports dates back to 1905, when the agency discovered that one of its statisticians revealed the cotton acreage by raising and lowering window blinds, according to a government history of the event.

A New York cotton trader standing outside the building received the signal and began placing trades. But the agency decided to further revise its numbers, making his inside information useless. Showing more ego than common sense, the cotton trader, Louis Van Riper, then openly claimed the estimate was fraudulent and accidentally exposed his scheme.

A more familiar feat of crop-report skulduggery was portrayed in the 1983 comedy "Trading Places," in which Dan Aykroyd and Eddie Murphy's characters cornered the frozen concentrated orange juice market with a stolen government crops report. (The fictional heist also involved crazy accents and a gorilla suit.)

The Agriculture Department encrypts data for some reports. And when a report with market consequences gets printed, telephones are disconnected and computers get their Web access cut. A security guard prevents anyone in the closed room from leaving until the report reaches the public.

"We're more concerned that people aren't translating information through electronic means, although the window shades are still locked," said Carol House, a deputy administrator at the Agriculture Department and chairwoman of the Agricultural Statistics Board.

"Every few months, I hear some rumor off the exchange that something has leaked out. I know that's not the case, because it can't."

Private predictions

The private consensus among analysts is that 88 million acres of corn will be planted this year, down from 93.6 million last year. Soybeans should rebound to 72 million acres after falling below 67 million acres. And it is possible that the total acreage farmed could increase.

Last year, more corn occupied land previously used for soybeans because biorefineries needed it to produce ethanol, the federally mandated additive for motor fuel. On Friday at the Chicago Board of Trade, corn futures priced at $2 a bushel a couple of years earlier commanded $5.60.

High commodity prices are the result of multiple trends. The demand for corn also is spurred by the emerging middle class in China and India splurging on protein-heavy diets, and cattle feed on grain.

Corn requires intense fertilization, which in turn pushes up demand for nitrogen, potash and phosphates. The greater demands lead to higher fertilizer prices that then influence which crops a farmer plants.

Unlike corn, soybeans naturally generate their own nitrogen, creating possible fertilizer savings. In an indication of how farmers are thinking, the specialized seeds for soybeans that can be planted after the wheat harvest and still mature before October already have sold out, said Richard Brock, president of Brock Associates, a commodities adviser in Milwaukee.

The head of the world's largest fertilizer enterprise, Bill Doyle, chief executive of PotashCorp in Northbrook, figures there will be enough nitrogen available for U.S. farmers, but he adds that with tightened phosphate and potash supplies, it could take years to adjust for the overall worldwide demand for fertilizer.

Better picture in June

Analysts note that the March survey serves as a baseline for a more exact plantings report released in June, once the crops are actually in the soil. And outside of the markets, the numbers will be further dissected as meteorologists chart weather conditions.

MDA Federal, a weather and mapping consultant, will host a conference Wednesday in Chicago to address these issues for companies that include ConAgra Foods, Tyson Foods Inc., Merrill Lynch and the Citadel Investment Group.

Meanwhile, Nick Kouchoukos, director of information services at Lanworth Inc., will monitor satellite images that condense a 12-acre block into a single pixel. The Itasca-based consultant uses the coarse pictures to project what effects a drought or flood might have before the next set of government numbers arrive, a strategy that requires an educated eye but no manipulation of window blinds.

"This is a tricky thing to do, but it's doable from space," Kouchoukos said.
 

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