The Roundup -

A Steak in Ag


R-CALF USA submitted a white paper to the Senate agriculture committee urging it to update the Livestock Mandatory Price Reporting Act (Act) prior to the Act’s Sept. 30, expiration. R-CALF USA asserted that packers had introduced new cattle procurement methods over the past five years that have significantly reduced price transparency. Rather than update the Act, Congress requested a mere study to determine if the Act was serving the needs of the livestock sector when it reauthorized the Act for another five years. Originally passed in 1999, the Act was a response to the increasing concentration in livestock markets that resulted in fewer and fewer animals being sold in the price discovery market, also known as the cash market. Increased market concentration brought with it new livestock procurement methods that significantly reduced marketplace transparency. Using new procurement methods, the concentrated packers in the 1990s began shifting large volumes of livestock away from the more public cash market and into more private marketing agreements, making actual sale prices difficult to discern.

The limited pricing information flowing from the concentrated packers placed farmers and ranchers who wanted to sell their livestock at a distinct disadvantage:  the packers knew what the fair market value of livestock was at any given time, but livestock sellers did not.

To equalize this imbalance in market information, the Act requires packers to report prices paid for cattle twice daily along with other details of their cattle procurement transactions.


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