New USDA Market News Reports to Enhance Price Transparency in Cattle Markets
WASHINGTON, August 5, 2021—The U.S. Department of Agriculture (USDA) today announced that beginning Monday, August 9, 2021, it will issue two new USDA Market News reports based on Livestock Mandatory Reporting data that will provide additional insight into formula cattle trades and help promote fair and competitive markets. This action is one piece of USDA’s efforts to deliver on President Biden’s Executive Order 14036 on Promoting Competition in the American Economy, which directed USDA to, among other things, “enhance price discovery, increase transparency, and improve the functioning of the cattle and other livestock markets.” The Executive Order on Competition launched a whole-of-government effort to promote competition, including 72 specific agency initiatives. USDA has already undertaken several other initiatives under the Executive Order, including announcing investments of at least $500 million in meat processing capacity, new rulemakings under the Packers & Stockyards Act, and a top-to-bottom review of the “Product of USA” label.
The first new report, the National Daily Direct Formula Base Cattle, which will be issued on Monday, August 9, will provide greater information into the foundational prices used in cattle market formulas, grids and contracts. The second report, the National Weekly Cattle Net Price Distribution, which will be issued Tuesday, August 10, will show the volume of cattle purchased at each different level of pricing within those formulas, grids, and contracts.
“During the past five years, stresses and disruptions caused by concentration in livestock markets have hurt producers, workers, and consumers, and highlighted vulnerabilities in America’s food system supply chain resiliency. Current negotiated cash cattle trade is approximately 30% less than it was in 2005, while formula transactions have increased at the same rate. Our new reports on formula transactions will bring needed clarity to the marketplace.” said Secretary Tom Vilsack. “Also, in the coming months, we plan to conduct several producer-focused outreach sessions to help producers and others understand how these data can inform real-world marketing decisions at farm, ranch, feedlot, and other points in the supply chain.”
These new reports will be issued by USDA Market News, overseen by the Department’s Agricultural Marketing Service.
This announcement also furthers the Biden-Harris Administration’s efforts to promote the resilience of critical supply chains as directed by Executive Order 14017 on America's Supply Chains. By providing greater insight into the nearly 80 percent of the cattle market traded outside of the cash negotiated spot market, the new reports shine more light on the prices paid to cattlemen and women and the overall market dynamics undergirding the prices consumers pay at the grocery store. USDA’s efforts to strengthen the food system is a vital component of the Administration’s whole-of-government response to address near-term supply chain challenges to the economic recovery. Through the Supply Chain Disruptions Task Force, of which Secretary Vilsack is a member, the Administration is convening stakeholders to diagnose problems and surface solutions—large and small, public or private—that could help alleviate bottlenecks and supply constraints related to the economy’s reopening after the Administration’s historic vaccination and economic relief efforts.
USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, ensuring access to healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate-smart food and forestry practices, making historic investments in infrastructure and clean-energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.
Source: USDA AMS Press Release