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Livestock
producers call for better price reporting
By
Cathy Roemer,Ag Weekly correspondent
WASHINGTON
(October 29, 2006) — Many livestock organizations are applauding President
Bush’s Oct. 5 signing of a bill reauthorizing the Mandatory Livestock Reporting
Act of 1999 to 2010. The LMR Act, requiring buyers and sellers of livestock to
report all transactions expediently to the U.S. Department of Agriculture,
expired last year. Since then, price reporting has been on a voluntary basis.
Two Iowa senators, Democrat Tom Harkin and Republican Chuck Grassley put aside
party politics in favor of their constituencies (many of whom are pork
producers), dusted off the Senate version of the LMR — which languished in
committee since last year — and brought it to vote.
Still,
neither the senators nor the livestock organizations got everything they wanted,
specifically, language incorporating recent recommendations by the General
Accounting Office to improve transparency and accuracy in price reporting.
However, Senator Harkin said passage of the bill at least ensures that mandatory
reporting is “back on the books.”
Senator Grassley agreed saying, “While passage of the bill is not an ideal
scenario, it was important that we have mandatory reporting in place instead of
relying on the packers to voluntarily report.”
Both senators say they have received commitments from Agriculture Committee
Chairman Saxby Chambliss, saying he will address the GAO’s findings in the next
Congress concerning lack of transparency and price reporting accuracy in the LMR
. Grassley and Harking said they hope to include those findings when the rules
governing the LMR are amended.
David
Kruse, president of Commstock Investments, an agriculture marketing service,
said the “devil will be in the details” when the LMR rules are finalized.
According to Kruse, loopholes abound when it comes to packers reporting prices.
He isn’t sure those loopholes will be closed in future rule making. Even though
legislation is in place , Kruse said enforceability lies within the rules and
when special interest groups influence rule making, enforcement can be
undermined.
“If special interests lose on the political side, they know they can go to the
rule-making side,” he said.
In this case, Kruse said as long as there is enough nontransparency in mandatory
reporting, packers are happy with it.
Cattlemen’s group Ranchers-Cattlemen Action Legal Fund USA supports the Iowa
senators’ efforts. “We look forward to working with Senators Harkin, Grassley
and Chambliss to make certain the USDA begins to implement the GAO
recommendations,” said R-CALF USA marketing committee chairman Randy Stevenson.
R-CALF director of government relations Jess Peterson said his organization
worked hard to move the Senate bill but “the American Meat Institute, along with
other agriculture industry groups, fought hard against legislatively addressing
these changes.”
National Cattlemen’s Beef Association vice president of government affairs Jay
Truitt pledges to join the push to accurate and timely livestock price
reporting.
“We will continue to work with the USDA to improve the mandatory price reporting
process, so that it will better serve the needs of all cattle producers,” he
said.
Michael Stumo, general counsel for the Organization for Competitive Markets in
Lincoln, Neb., said OCM wants to see every price reported in every region.
Under the current rule — one Stumo says packers lobbied hard for — if only one
or two packers are bidding on cattle in a region, they are exempt from
reporting. Since the industry is heavily consolidated, it is not difficult to
have a region where only one or two are bidding.
“This is a gaping loophole in price reporting,” he said.
If there were more competition, price reporting would not be as crucial, he
said. But with one potential buyer and no information, cattle producers are at a
severe disadvantage.
Stumo said he hopes the amended rules will go to the heart of the matter and
correct the problem in which he sees “The USDA as an accomplice of low-ball
pricing by creating these price information black-outs in regions where there is
only one packer and already low market prices.”
http://www.agweekly.com/articles/2006/11/01/news/ag_news/news02.txt
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