Livestock Mandatory Reporting: Bringing transparency to the marketplace
The Livestock Mandatory Price Reporting (LMR) Program was established to expand pricing information available in the livestock industry. Part of USDA Market News data, the information is distributed by the Agricultural Marketing Service (AMS) and allows analysts to dive in head first and fulfill all of their number crunching ambitions.
The purpose of the program is to provide marketing information for cattle, swine, lamb, and livestock products that can be readily understood and utilized by producers. Livestock Mandatory Reporting encourages competition in the marketplace by vastly improving price and supply data, bringing transparency, breadth and depth to market reporting. The program gets its authority through the Livestock Mandatory Reporting Act of 1999, which must be reauthorized by Congress every five years. The program is up for reauthorization in September 2015.
Thousands of business transactions every day rest on the outcome of Livestock Mandatory Reporting data. From the small farmer looking to market a few head of cattle to the giant packer looking to increase their profits, USDA Market News is an invaluable resource.
Here is a real life example of how it works. Last year was one for the record books. Beef cutout levels climbed at an alarming rate, and it was clear that something unusual was happening. Cattle were in tight supply, which means trimmings were also in tight supply. In the winter months, ground product and end meats – such as chuck or round roasts – are in demand as consumers prepare hot chili and stews. In order to meet this demand, packers found themselves grinding primal cuts and selling them as ground beef causing ground beef prices to reach record highs.
Suddenly, it seemed that ground beef was something everyone should have been paying close attention to all along. You asked, we answered. We now publish a section on the Weekly Cattle and Beef Summary that includes information about the effect of ground beef and trimmings on the National Boxed Beef Comprehensive Cutout. We also expanded the National Weekly Comprehensive Item Summary to include additional ground beef and trimming pricing information.
In a voluntary reporting situation like we utilized in the past in, which meatpackers voluntarily provided pricing information to AMS, finding the cause of price fluctuations would be much more difficult. The difference with Livestock Mandatory Price Reporting, however, is that by collecting and disseminating such a detailed amount of data, we are able to quickly reveal exact reasons for why changes in the marketplace are taking place.
This year marks the 100th anniversary of USDA Market News. Over the years, our reports have evolved but our service and dedication to the agricultural industry remains our focus. Over the course of 2015, we will continue to provide information about Market News. The USDA Market News Portal is available at www.marketnews.usda.gov where you can explore all of our Livestock Mandatory Reporting reports.