USDA quick to revamp livestock mandatory price reporting program

WASHINGTON – The USDA is making improvements to its Livestock Mandatory Price Reporting Program to ensure more accurate and complete collecting, disseminating and reporting of market data by the Agricultural Marketing Service.

On May 18, 2001, U.S. Ag Secretary Ann Veneman assigned a team to review the program after inaccurate reports for boxed beef carcass values were released during its first six weeks in operation.

Cow-calf operators and feedlots incurred financial losses totaling $15 million to 25 million as a result of price reporting errors, while losses to packers and futures traders are undetermined.

Findings.

The team submitted its report July 2. Key findings and recommendations are:

* There was a programming error and inadequate testing done prior to and after April 2 to ensure accuracy of reports.

AMS will now parallel test the data to experience a wide range of reporting conditions; work with livestock/meat industry to develop realistic validation data sets; use validation data sets to test any change in programming; test all changes on test systems and develop additional procedures to ensure correct input data.

* The audit surveillance plan for ensuring the accuracy of data being submitted is behind schedule and needs improvement.

To correct this, AMS will accelerate the audit process, change job hiring specifications, seek additional personnel details or utilize other agency personnel.

* Confidentiality provisions are preventing release of a significant portion of information, and requires change.

The USDA mandatory price reporting system went into effect on April 2, 2001, with a restrictive guideline which prevented USDA from releasing pricing data if less than three packing companies report it, or if any one company represented more than 60 percent of any line of report to USDA.

The USDA is considering an alternative confidentiality standard to the 3/60, which will apply confidentiality standards to data collected over a multi-day period rather than the current several hour collection period. USDA not liable.

The review team found that USDA is not liable for any losses incurred and has no authority to make compensation payments as a result of the misreported data.