‘After-The Fact’ Price Reporting is No Solution to Cattle Crisis
Analyzing the Proposed Price Reporting Bill
The present Packer-NCBA proposal is a disgrace and disservice to cattle producers and should be completely discarded. In some ways this proposal is worse than the current voluntary reporting system. Today, sellers have immediate access to whatever voluntary information is available. Under the Packer-NCBA proposal, information would be old news, and would be available only at the packer’s control, most likely after the week’s trade is over. The Packer-NCBA proposal still maintains secrecy of the terms of formula, contract and other possible anti-competitive packer supply control methods.
The packers and their “captive” representative, the NCBA, have announced the following goal:
“The goal of mandatory price reporting is to improve market transparency and allow the producer to have more information available to base marketing decisions on.” If only the information allowing cattlemen to make timely decisions was facilitated by this bill, there would be no complaint. Unfortunately, it does not.
Cattlemen won the policy fight at the NCBA convention for mandatory price reporting only to be sold out…
While it may sound good, it means nothing when the actual proposed language is analyzed. Cattlemen won the policy fight at the NCBA convention for mandatory price reporting only to be sold out by the packer-friendly faction within NCBA and NCBA staff in the drafting of the proposed legislation. Collusion is evident and widespread. What has been produced under the guise of “price reporting” is a sham.
As you know, the meat packing industry is highly concentrated. The big packers are now in a position of total control of the industry. Through various methods of controlling supply and demand, the big packers are able to maximize their profits at the expense of both producers and consumers and threaten our nation with the loss of a dependable food supply. The big packers need immediate restrictive emergency regulation to prevent them from doing any further damage to the industry and livestock producers. Packers or their representatives should have no say in this legislation. When they have, such as in this so-called price reporting bill, you see the result – a further strengthening of their monopolistic control.
This Monopoly game is over – Packers have all the money, control, and information
The goal of a mandatory price reporting bill should be to establish special rules and regulations for only the big packers now controlling the markets, and to dissipate that control, such as:
- Restoring price discovery and a more fair and equitable distribution of the consumer meat dollar back to the producer.
- Providing full and complete, timely, on the spot market information on a daily basis of all purchases or sales of cash cattle, beef and beef by-products whether imported, exported or domestic.
- Providing full and complete, timely, on the spot market information on any and all contract, formula, captive or otherwise packer-controlled cattle supplies beyond seven days of delivery.
- Providing all details of the agreement to the public on any captive supply, formula, contract or otherwise packer-controlled supplies of cattle.
- Providing the public and law enforcement officials better access to information, enabling more effective enforcement and prosecution of applicable antitrust laws.
- Providing enforcement officials with clear and mandated orders to guarantee strict adherence to the law.
- Providing strong penalties and deterrents for noncompliance.
It is urgent that a new bill be written embodying these provisions with only livestock producers in mind, giving them the protections against packer ‘anti-competitive’ actions as guaranteed in the Packers and Stockyards Act.