GIPSA Seeks to Clarify Captive Cattle Supplies

January 22, 2002

USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) has released a report that seeks to clarify the definition of captive supplies and provides ways that the Department can ensure clear reporting of information in the future. The report was conducted in response to a Congressional mandate in the 2001 Agricultural Appropriations bill. The report, A Captive Supply of Cattle and GIPSA's Reporting of Captive Supply, clarifies GIPSA's definition of the term "captive supply" and compares GIPSA's captive supply statistics to statistics published by other organizations, including USDA's Agricultural Marketing Service.

The report also compares 1999 procurement transactions data of the top four beef packers to summary captive supply data the packers submitted to GIPSA. The report points out that differences in captive supply statistics reported by various organizations result from conflicting definitions and variations in the geographical bases of the data collection. GIPSA defines captive supplies based on whether a packer commits to purchase livestock before the animals are ready for slaughter. GIPSA's analysis of the top four beef packers' 1999 transactions data revealed that the summary captive supply statistics the packers reported to GIPSA included cattle procured from non-reporting subsidiaries, affiliates, owners and employees, if the animals were procured through a captive supply arrangement.

Based on its review of the top four packers' transactions records, GIPSA found that captive supplies accounted for 32.3% of the firms' total slaughter rather than 25.2% as reported in the packer' annual reports to GIPSA. The data discrepancies are attributed to misunderstandings about captive supply definitions and computational errors. GIPSA will publish its definition of captive supply in the Federal Register. The definition is this: livestock that is owned or fed by a packer more than14 days prior to slaughter; livestock that is procured by a packer through a contract or marketing agreement that has been in place for more than 14 days prior to slaughter; and livestock that is otherwise committed to a packer more than 14 days prior to slaughter.

Copies of the report are available on the internet at: http://www.usda.gov/gipsa/pubs/captive supply/captive.htm For further information, contact: JoAnn Waterfield, Deputy Administrator, Packers and Stockyards Programs, GIPSA, 1400 Independence Ave., Washington, DC 20250; phone 202-720-7051.

The National Cattlemen's Beef Association issued a statement that said, "Marketing practices have changed as producers have searched for ways to market their cattle for additional value and packers have responded to producer requests for new marketing alternatives. NCBA appreciates the efforts at GIPSA to clarify perceptions about changes taking place in the industry and is pleased that GIPSA will issue a definition of captive supply and other reporting terms. NCBA will fully participate in the rule-making process."