Mandatory Livestock Price Reporting Bill Approved

July 30,1999

The Senate Agriculture Committee Thursday approved legislation to require mandatory price reporting for livestock packers. The legislation requires cattle processing plants that slaughter an average of 125,000 head a year to report purchases twice a day to USDA. Hog plants that slaughter 100,000 or more a year also would be required to submit purchases three times a day to USDA. That effectively captures 94% of the livestock markets by requiring 10% of all plants to report.

For beef plants:

--All cattle reports would be segregated into prices and volumes of cattle purchased in the domestic market.

--Corporate offices, or officially designated representatives of cattle processing plants that have slaughtered an average of 125,000 head a year in the last five calendar years would report to USDA all cattle purchases live or on a dressed weight basis that have been turned in since the last report they made to USDA. Packers would report twice daily, and USDA would publish a morning, afternoon and a previous day summary reports.

--Reports would designate whether livestock included fed steers, fed heifers, Holsteins, cows, bulls or other bovine for slaughter. USDA would continue publishing regional and/or state reports "as appropriate" under USDA aggregation guidelines consistent with the current reporting framework.

--Packers would report information weekly to USDA on all cattle purchased on a method other than those on a negotiated cash purchase (spot market). USDA would report by Friday of each week the range and weighted average premiums and discounts, weighted average prices, volumes and terms of trade paid during the prior week. The report also would include the range of prices and weighted average in-the-beef price paid for all cattle purchased on a non-spot formula or grid for all cattle purchased during the previous week.

--Existing U.S. government data on imported beef could be presented to the public in the same format that the Foreign agricultural Service reports export beef.

--It would be considered a violation of law for any corporate office to intentionally delay reporting of any type of fed cattle purchase or for any buyer or seller to request non-reporting or mis-reporting of the sale as a condition of trade.

--Packers would have to report to USDA the negotiated price and volume, by lot, of boxed beef sold according to grade. USDA would have to issue reports twice a day, as it does now.

--USDA would use national retail scanner data collected by Information Resources Inc. or other national retail scanner databases to develop retail price reports based on sales volumes and prices to create an accurate farm to retail spread data.

--USDA would have to add beef to its existing commodity export report and update its export certificate program so it is automated and on line. The automated system would provide producers with timely and accurate information. USDA would collect and distribute imported beef information consistent with export reporting.

Pork price reporting provisions:

--By 8 a.m. each day, USDA would publish prices, volumes and terms of sale for domestic swine from the previous business day, grouped by purchase type, and all hogs slaughtered the previous day, by purchase type, from federally inspected packing plants that slaughter 100,000 hogs or more per year.

--Prices would reflect all premiums, discounts and carcass merit adjustment. Data would be published in the aggregate based on geographical regions established by USDA.

--USDA also would publish a mid-morning report at 11 a.m. (CT) and a mid-afternoon report at 3 p.m. (CT) reflecting packer estimates for swine purchases and slaughter for that day. The reports would include volume, base market pricing, cash and spot market purchases and contract sales and packer owned hogs.

--Subject to appropriations, USDA would maintain an electronic library of each type of open market contracts, absent price information, offered by packers. Notice of such types of contracts being offered would be made public by request or over the Internet.

--USDA would produce a simplified hogs and pigs inventory report released monthly and available on the Internet to eventually replace the current quarterly publication.

--USDA would publish weekly information on the total slaughter of swine that reflected differences in numbers between barrows and gilts.

National Pork Producers Council President John McNutt said the NPPC goal "is to ensure that pork producers have transparent, accurate and timely livestock marketing information, and the bill passed (by the committee) does just that. I hope the momentum crated by the committee's strong (17-0) support can be replicated in the House Agriculture committee and through the remaining steps of a process we hope will culminate in early fall with President Clinton's signature."

"This legislation bridges obvious gaps in our livestock system," said Sen. Tom Harkin (D-IA). "It gives our farmers more information about the markets (so they) can better evaluate the fairness of bids or contract offers and negotiate for stronger prices."