Earlier this year, USDA’s Agricultural Marketing Service (AMS) published the first Livestock Mandatory Reporting (LMR) Wholesale Pork reports. This was the culmination of a process that started when Congress passed the Mandatory Price Reporting Act of 2010, which added wholesale pork cuts to the commodities required to be reported by packers. Cattle, swine, sheep, boxed beef, boxed lamb, and imported lamb meat already were covered under the program.
Using negotiated rulemaking – a process that allows more interaction with stakeholders than formal rulemaking – AMS developed the rule with the Wholesale Pork Reporting Negotiated Rulemaking Committee, which included pork producers, pork packers, processors, retailers, buyers, and other interested stakeholders. By working directly with a range of stakeholders, USDA ensured that the final rule had support throughout the industry.
In January 2013, pork processing plants began submitting the price and quantity of each sale, as well as sale characteristics like type of sale, item description, and destination. The new system captures more data on negotiated spot market trades; formula, forward, and export trades; less-than-carlot pork sales; pork sales to NAFTA countries; and frozen pork sales. Packers are reporting products that AMS was not previously able to collect, like skinless bellies and some boneless ham cuts.
AMS uses this information to produce market reports for the public that provide significantly more information and a more complete, accurate picture of the industry. AMS has already seen a jump in the volume of daily negotiated transactions reported by the industry, with more than eight times as many transactions being captured. The increased volume of sales transactions yields more data that can be used as the basis for calculating the daily pork carcass cutout value – a key pricing mechanism used by the industry.
Everyone knows the saying, “Knowledge is power.” Having spent decades working with livestock producers, dealers, and markets, I know this is also true in livestock production and marketing. That is why it is critical to distribute this robust, reliable, timely information to everyone in the pork industry. Leveling this information playing field will mean more confidence in the fairness and transparency of the prices being paid throughout the marketplace. The sheer volume and breadth of pork products reported with LMR provides the entire pork industry with more market information than ever before. This greater market transparency is a testament to the success of the LMR program.
USDA is committed to supporting businesses of all sizes. Fostering marketplace transparency is just one of the many ways we meet this goal. But we don’t do it alone – this new program wouldn’t have been possible without the dedication of the negotiated rulemaking committee and the stakeholders that USDA employees worked with throughout the process.