USDA Creates New Livestock Price Reports To Increase Transparency

The United States Department of Agriculture (USDA) has announced that it will release two new USDA market intelligence reports based on data from the Livestock Mandatory Reporting that will provide additional insight into the beef cattle trade and will help promote fair and competitive markets.

The first new report, the National Daily Direct Formula Base Cattle, will provide more information on the fundamental prices used in formulas, schedules and contracts in the cattle market. It will be released on August 9.

The second report, the National Weekly Cattle Net Price Distribution, will be released on August 10. It will show the volume of livestock purchased at each different price level in these formulas, schedules and contracts.

“Over the past five years, the tensions and disruptions caused by the concentration in livestock markets have hurt producers, workers and consumers, and have highlighted vulnerabilities in the resilience of the supply chain of livestock. American food system. The current traded trade in cash cattle is about 30% lower than it was in 2005, while formula trades have increased at the same rate. Our new formula transaction reports will provide the necessary clarity to the market, ”said US Secretary of Agriculture Tom Vilsack. “Additionally, in the coming months, we plan to host several producer-focused outreach sessions to help producers and others understand how this data can inform real-world marketing decisions on the farm, across the country. ranch, feedlot and other points in the supply chain. “

These new reports will be published by USDA Market News and overseen by the department’s agricultural marketing service.

  • The National Daily Direct Formula Base Cattle reports will allow traders to see the correlation between the traded trade and the reported formula base prices, as well as the aggregate values ​​paid in the form of bonuses and discounts. The daily formula base price reports will have a national scope and will be published in morning, summary and afternoon versions. The basic weekly and monthly formula reports will be both national and regional and will include information on basic futures purchases.
  • The national weekly net cattle price distribution report will show at what levels (price and volume) trading occurred on the weekly weighted average price for each type of purchase: negotiated grid, negotiated, formula and futures contract. Currently, the market is speculating on wholesale or small volumes of livestock on both sides of the price differential. And in fact, with bonuses and discounts applied to prices, the spreads shown on reports can be wide. Publishing a price distribution for all net cattle prices will provide more transparency to each of the purchase type categories. This report is a window into what producers are paid for livestock (net) and maintains confidentiality by separating purchased volumes in increments of $ 2.00 +/- the daily weighted average price based on premiums and discounts. AMS has published a similar report on the distribution of net prices for direct pigs since January 2010.

USDA publishes price reports under Executive Order of President Joe Biden, which ordered the agency “to improve price discovery, increase transparency and improve the functioning of livestock and livestock. other livestock markets ”. As part of the executive order, the USDA also announced investments of at least $ 500 million in meat processing capacity, new rules under the Packers and Stockyards Act, and a review of the “Product of USA”.

By providing better insight into the nearly 80% of the cattle market traded outside the cash traded market, the new reports further shed light on the prices paid to ranchers and ranchers and the overall market dynamics underpinning them. price that consumers pay at the grocery store. .

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