(May 6, 2015)

Contact: Andrew Jerome, 202-314-3106

WASHINGTON (May 6, 2015) – National Farmers Union (NFU) President Roger Johnson today encouraged Congress to reauthorize the Livestock Mandatory Price Reporting Act — an important tool in combatting problems caused by high concentration and vertical integration in livestock markets — and offered suggestions for making the price reporting data a more effective and usable tool for family farmers and ranchers.

“Price reporting is an important tool in addressing the market failures caused by the high levels of concentration in livestock markets,” said Johnson in a letter to Chairman Pat Roberts, R-Kansas, and Ranking Member Debbie Stabenow, D-Michigan, of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. “NFU encourages the Senate to review and reauthorize the Livestock Mandatory Price Reporting Act in an open and transparent process.

Johnson offered a series of suggestions for improving cattle reporting in order to capture more transactions and ensure the data is more accurate and usable. Those suggestions include:

  • Data omitted from public reports due to the confidentiality rule (3/70/20 confidentiality guideline) should be aggregated both weekly and regionally.
  • Clarify reporting definitions for cattle such that it is consistent with country-of-origin-labeling. Mandatory Price Reporting (MPR) data considers cattle to be of domestic origin even if they are imported, so long as they spend some time in U.S. feedlots. A recent report by Dr. Bob Taylor of Auburn University found this loophole resulted in roughly one million cattle per year failing to show up in MPR data, while showing up in trade statistics.
  • Require weekly reporting of market concentration through the use of the Herfindahl-Hirschman Index (HHI) for both captive supplies and cash transactions. This should be reported both regionally and nationally.
  • Improve usability of the MPR Dashboard and Data Mart, including prominent display of definitions for reports, weekly histograms with the day of the week for negotiated sales, and graphs showing the thinness of the cash market by day.
  • Separate the data for forward contracts from those tied to the futures market.

Johnson noted that the latest estimate for the four-firm concentration ratio (CR4) in beef indicates that the top four meatpackers control 85 percent of the market share – a serious competition issue reflected across the U.S. livestock industries.

NFU has worked to address farmers’ and ranchers’ power in the marketplace since 1902. “NFU has a long history of addressing competition issues in the marketplace and advocating on behalf of family farmers and ranchers,” said Johnson. “At our recent annual convention, delegates approved a special order of business on transparency in livestock markets noting the importance of mandatory price reporting to address substantial changes in livestock markets.”

Johnson also sent a similar letter to Chairman Michael Conaway, R-Texas, and Ranking Member Collin Peterson, D-Minnesota, of the House Committee on Agriculture.

National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.