Chicago | Reuters — Retail giant Wal-Mart joined a group of volunteers counting corn ears and soybean pods in fields in the U.S. recently in a clear sign traditional crop tours are expanding their appeal from farmers and traders to all those with a stake in the U.S. food chain.
These annual trips to gather detailed on-the-ground information on crops in the world’s biggest grains producer have long been seen as a way to glean market-moving details not found in commodity analyst notes or government reports.
But now their popularity is booming as a chance for those usually far from the field to develop relationships with growers themselves and to earn mud-on-the-boots credibility with clients and suppliers.
The Pro Farmer crop tour last month involved 120 people, double the number a decade ago, from countries spanning Switzerland to Argentina, who travelled roughly 2,500 km across the Midwest and waded into more than 1,300 fields.
Wal-Mart, known for its low prices, sent representatives for the first time on this tour, after trying out a wheat trip two years ago. It has a rising interest in food supplies, having grown its grocery business from around seven per cent a decade ago to over 70 per cent of sales now.
“We are always looking for ways to better understand our business. We attend farm tours to learn about crops so we can make smart buying decisions in our efforts to pass on savings to our customers,” said Tim Robinson, Wal-Mart’s director of dry grocery, who traveled from Ohio to Minnesota with the tour.
After scouting a corn field in Ford County, Illinois, a roadside encounter with a farmer gave Robinson just such knowledge. The farmer said his crop, slated for delivery to snacks maker Frito-Lay, whose products pack Wal-Mart store shelves, was by far his best ever.
That revelation echoed what Robinson had encountered all week: massive corn yields that have reduced grain costs for his suppliers to the lowest in years.
Target, which has also expanded grocery in recent years, declined to comment when asked if it would attend in future. Supervalu, whose chains include Cub and Save-A-Lot, also did not attend but a spokesman said it regularly meets growers.
Other new volunteers include analysts and traders a few states away to as far afield as Britain or Thailand who feel they get information which gives them an edge over competitors.
“You can only really understand a market by getting dirty and in ags that means you go get out and about and literally get mud on your boots,” said Fiona Boal, a London-based analyst with asset manager Hermes on her third tour.
She called back farmers she met on the tour to confirm that soybean growth had exploded after the rain-soaked excursion. “That sort of anecdotal information from informed on-the-ground sources is invaluable to an investor,” she said.
Insights gleaned from the tour encouraged first-year participant Angie Maguire, a trader and elevator manager in Charlotte, Michigan, to lock in first quarter 2015 corn sales to a commercial buyer, confident that prices were likely to drop.
“Some other folks may not step up and be willing to put sale on but I feel comfortable after seeing the crop,” she said.
The tours are not without critics, however, who say they focus on incomplete information that trickles out via phone, email and social media.
Data from other tours, such as those hosted by Lanworth, a division of Thomson Reuters, or by forecaster MDA Weather Services, tends not to emerge until the end as they draw smaller crowds and information is shared with a limited client base.
Corn and soybean futures each fell more than 1 percent during the Pro Farmer tour.
“My take on yield surveys. The more information that’s known about our crops the less we receive for them,” tweeted Tom Burnham, an Arkansas farmer who has never participated.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago.