Organization for Competitive Markets
P.O. Box 6486
Lincoln, NE 68506
Date: November 17, 2004
FOR IMMEDIATE RELEASE
Contact: Michael Stumo, General Counsel, 860.379.6199
OCM: Mandatory Price Reporting Should be Renewed and Improved
Lincoln, NE ~ The Organization for Competitive Markets (OCM) is urging Congress to reinstate the 1999 Mandatory Price Reporting Act, which expired on October 25. A one-year extension of law was passed by the U.S. Senate but was not acted upon by the U.S. House of Representatives before Congress recessed for the November elections. Congress may extend the law for one year, as is, in this so-called lame duck session through an omnibus bill.
In the interim, USDA’s Agricultural Marketing Service (AMS) told data users that AMS has urged meat packers to continue filing the mandatory reports on a voluntary basis until the House reconvenes and can take action.
“The 1999 Mandatory Price Reporting Act should be renewed and then fixed to close loopholes in the legislation,” stated Keith Mudd, OCM President. “We don’t want to go back to the bad old days of voluntary reporting by packers. Market participants had more suspicion and less trust in the USDA Market News Service reports when price reporting voluntary. There have been many problems with USDA’s administration of the rule. However, it should not have been allowed to expire. Mandatory price reporting by the packing industry as mandated by Congress provides additional market transparency for sellers who need reliable, timely and truthful information to make marketing decisions,” noted Mudd, a Missouri farmer.
Mudd said OCM recommends that Congress consider improving price reporting in several ways to provide uniformity, transparency and honesty: 1) packers and USDA report all transactions; 2) eliminate the 30/70/20 rule; 3) simplify the hog price reporting matrix; 4) include all high prices reported in the public reports; 5) report all prices as plant delivered prices; price by a transportation cost; and 6) statistically harmonize the grade and yield specifications among different hog packers for reporting purposes. Additionally, AMS enforcement actions should be publicly disclosed. They will increasingly eliminate strategic pricing conduct or “gaming the system.”
“Honest and accurate market reports are a necessary tool for producers making management decisions. The original legislation has a clause prohibiting USDA’s release of ‘proprietary information’ which has been unduly used to keep important information from producers. OCM is quite hopeful that the current administration will take seriously its responsibilities to America’s heartland and the thousands of independent farmers and ranchers who provide this nation with its food and fiber,” said Mudd. “Reinstating the Mandatory Price Reporting Act and fixing it for the future will send a strong message that the Congress and the Bush Administration are willing to fulfill their commitment to the people who re-elected them.”
The Organization for Competitive Markets (OCM) is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities. OCM helps lead the Cattlemen’s Competitive Market Project which is a voluntary contribution program funding the effort to increase demand for U.S. cattle and beef in open and competitive markets.