immediate release -- April 17, 2000.
Contact Bob Brammer, 515-281-6699
General Miller Comment on
Proposed USDA Livestock Reporting Rules
Iowa Attorney General Tom Miller sent a letter April 17 to the U.S. Department
of Agriculture submitting a formal Comment on USDA's proposed rules to
implement the Livestock Mandatory Reporting Act of 1999.
For example, Attorney
General Miller stated that the new data should be reported on a state
and regional level, and not on the national level alone. Because the market
for slaughter hogs is in most cases a local market, the proposal to report
data only on a national level actually decreases the accuracy of the present
regional reporting system, the Comment argues.
For more information
on the Attorney General's Comment on the proposed rules, please contact
Asst. Attorney General Steve Moline of the Farm Division at 515-281-6634.
The full text of the
April 17, 2000
John E. VanDyke
& Grain Market News Branch
Docket No. LS-99-18
Department of Agriculture
Avenue, SW, Room 2619-S
Re: Livestock Mandatory Reporting; Proposed Rule, Federal Register, Vol.
65, No. 53, pages 14651-14691, Docket No. LS-99-18
Dear Mr. VanDyke:
The Iowa Attorney
General's Office submits these comments on the proposed rules implementing
the "Livestock Reporting Act of 1999", as published in the Federal
Register, vol. 65, No. 53, pages 14651-14691.
Over the last decade,
the participants in the livestock industry have significantly changed
the way they buy and sell livestock. While these changes have affected
all species, they are most pronounced in the hog market where as many
as 70% of the hogs are now sold using some form of contractual sale as
opposed to the traditional spot-market system. The existing livestock
price reporting system does not report contracted sales. As a result,
the market data reported by the system does not include the majority of
hogs marketed each day. This discrepancy has raised concerns with most
participants, especially producers, that the market data reported by the
existing reporting system does not accurately reflect market conditions.
The desire to have
more accurate market information was the driving force leading to enactment
of the Livestock Mandatory Reporting Act of 1999. The Agricultural Marketing
Service (AMS) cites a similar goal for its proposed rule implementing
the Act: "The objective of this proposed rule is to improve the price
and supply reporting services of the Department of Agriculture in order
to encourage competition in the marketplace for livestock and livestock
products by increasing the amount of information available to participants."
Federal Register, vol. 65, No. 53, page 14662. The Iowa Attorney General's
Office in the past has supported and continues to support these efforts
to provide complete, relevant, and accurate market information to Iowa
April 17, 2000
In an effort to suggest
changes in the proposed rule that will result in the new reporting system
more effectively meeting these valuable goals, the Iowa Attorney General's
Office submits the following comments:
The data collected
by the new reporting system should be reported on a state and regional
level in order to improve the quality of the data presently reported by
the AMS. In fact, since the market for slaughter hogs is in most cases
a local, not a national market (usually involving a geographic area much
smaller than an entire state), the present proposal to report data on
a national level decreases the accuracy of the present regional reporting
system. Any concerns regarding maintaining the confidentiality of information
should be very narrowly construed, since the express legislative purpose
of the Act is to increase the market information available to participants
in the livestock markets.
In order to allow
for better oversight and enforcement, the exact time of the transaction
should be maintained in the records that packers are required to keep
rather than recording the transaction during one of three blocks of time
as required in the proposed rule.
Packers should be
required to submit to AMS, on a lot basis, the relevant raw data used
to calculate the packer's percent lean. Absent the raw data, oversight
and enforcement by GIPSA and other applicable state agencies, such as
the Iowa Attorney General's Office, is vastly more difficult and in the
end less effective.
The rule should contain
an express procedure to address the potential need for state enforcement
agencies to use their legal authority to gain access to the raw data collected
5. AMS needs to use
as much care as possible to make sure that reported data accurately reflect
market reality. For example, aggregating price data from floor, ledger
or window contracts with formula contracts that do not include the price
limitations included in those contracts could result in reported data
that does not accurately reflect market conditions.
6. Packers should
be required to provide producers with the raw data they used to calculate
the percent lean of a producer's hogs so that producers can compare their
transaction results with the AMS's publicly reported information.
The scope of the contract
library maintained by the USDA needs to include copies of entire existing
marketing contracts offered by packers, including pricing terms, if that
library is to provide the kind of market information necessary to meet
the express legislative purpose of the Act.
April 17, 2000
The Iowa Attorney
General's Office appreciates the opportunity to submit these comments.
If you have any questions or need any additional information, please contact
my Office at your convenience.
THOMAS J. MILLER
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