990571 Price Reporting Creates Equity for Pork Producers

Washington - Legislation proposed by pork producers that will require daily price reporting by packers will create the first transparent, accurate and timely livestock market reporting system in America, National Pork Producers Council President John McNutt told the Senate Agriculture Committee May 26.

“Our primary goal in launching this effort was to provide pork producers with the daily price information they need to make knowledge-based business decisions for the future,” McNutt said in explaining the principles contained in the “Pork Industry Mandatory Reporting Act of 1999.” “This bill is workable, fair, and will produce better information for producers than they have access to today.” McNutt is a pork producer from Iowa City, Iowa.

The legislation was presented to the Senate and House Agriculture Committees on May 24. Under the provisions of the bill, USDA will publish by 8 a.m. each day: all prices, volume 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 all federally inspected packing plants that slaughter more than 250 hogs per day.

Price data will reflect all premiums, discounts and carcass merit adjustments. Data will be published in aggregate form based on geographical regions established by the Secretary of Agriculture.

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

The legislation also requires:

USDA to maintain for the public an electronic library of open marketing contacts, absent pricing information, being offered by packers who slaughter more than 250 hogs daily with plant-specific listings; Replacing the quarterly hogs and pigs report with a monthly publication; improved monthly reporting on retail sales of all meat products and; A comprehensive study of the Secretary of Agriculture's powers and authorities to regulate the livestock sector under the Packers and Stockyards Act of 1921 and all other federal laws and precedents.

The Agriculture Marketing Service (AMS) will collect all data and make it available electronically, if possible. AMS will devise rules to preserve confidential business information. Compliance and enforcement will be carried out under the Packers and Stockyards Act by the Grain Inspection Packers and Stockyards Administration (GIPSA). Violations of the law would be punishable by fines of $10,000.

McNutt stressed that while packer input was welcomed in writing the legislation, the two sides could not come to agreement on some provisions, which were made clear to the committees.

“We believe very strongly, for example, that transactions should be stamped with a date and time, but packers disagree,” McNutt said. “It is done this way for stock market transactions and in grain trading and we think it will produce confidence in the system.

McNutt said NPPC would be meeting with members of Congress to fully explain provisions of the bill and why they were important to producers.

“This is a complex subject,” McNutt said. We were determined to produce a bill that is tough but fair for everyone. Otherwise, it wouldn't be any better than what we have today.”

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