NCBA Supports Marketplace Transparency
US - National Cattlemen’s Beef Association Vice President of Government Affairs Colin Woodall said the approval of The Mandatory Price Reporting Act of 2010 (S. 3656) Sept. 15, 2010, by the U.S. House of Representatives will continue to encourage transparency in the marketplace.
20 September 2010
2 minute read
The move comes after the US Senate’s vote last month to reauthorise mandatory price reporting, which was set to expire Sept. 30 of this year. Mr Woodall said mandatory price reporting allows for transparency in the marketplace without unnecessary government intrusion and privacy invasion.
"Along with transparency, mandatory price reporting encourages competition in the marketplace without violating producers’ privacy by substantially increasing the volume of industry sales transactions reported by the US Department of Agriculture (USDA),” said Mr Woodall.
“This mandatory reporting provides US producers with readily understandable and timely information regarding pricing, contracting for purchase, and supply and demand conditions for all segments of the beef industry.”
The Mandatory Price Reporting Act of 2010 will reauthorise mandatory price reporting programs run by USDA for five years. The Act requires livestock sales information to be reported and published in a timely fashion, allowing buyers and sellers to make more informed decisions.
“Producers have come to rely on the information provided by mandatory price reporting to aid in their negotiation of sales prices for cattle and meat products,” said Mr Woodall.
Prior to 2001, information was collected by observing public auction markets and via voluntary submission by market participants. However, by 1999 many producers had come to notice fundamental changes in the market structure.
About 35 per cent of fed cattle sales in 1999 occurred via contract agreements that were not covered by USDA reports. Bruce Hafenfeld, California cattle producer and NCBA’s policy division chair, said these unreported transactions hampered producers' ability to accurately assess livestock prices, negotiate with packers or obtain a fair price when selling their livestock.
He said requiring price reporting augments producers’ knowledge base when making marketing decisions by providing them with pricing and sales information from transactions around the country.
“By reauthorising mandatory price reporting, cattle producers will continue to have access to daily price and volume information on purchases of cattle and boxed beef sales as well as export and import data," Mr Hafenfeld said. "This effort to enhance transparency in the marketplace is a definite win for every aspect of the industry.”
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