Sen. Marshall Helps Attain New USDA Price Transparency Reports in Cattle Markets
(Washington, D.C., August 5, 2021) – U.S. Senator Roger Marshall, M.D. issued the following statement after the U.S. Department of Agriculture (USDA) announced the creation of 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 announcement follows multiple meetings between Senator Marshall and USDA leadership on price transparency in cattle markets.
“I’ve had several conversations with the USDA asking for more meaningful information within the formula reporting bucket so Kansas cattle producers can make informed business decisions,” said Senator Marshall. “I applaud USDA for making this information available to the public, and will continue to work with Department leadership to help make markets more transparent.”
The National Daily Direct Formula Base Cattle reports will enable stakeholders to see the correlation between the negotiated trade and reported formula base prices, as well as the aggregated values being paid as premiums and discounts. Daily formula base price reports will be national in scope and released in morning, summary and afternoon versions. The weekly and monthly formula base reports will be both national and regional in scope and include forward contract base purchase information.
The National Weekly Cattle Net Price Distribution report will show at what levels (price and volume) trade occurred across the weekly weighted average price for each purchase type – negotiated, negotiated grid, formula and forward contract. Currently, the market speculates whether large or small volumes of cattle trade on both sides of the price spread. And in fact, with premiums and discounts applied to the prices, the spreads shown on reports can be wide. Publishing a price distribution for all cattle net prices will offer more transparency to each of the purchase type categories. This report is a window into what producers are paid for cattle (net) and retains confidentiality by segregating volumes purchased in $2.00 increments +/- the daily weighted average price depending upon premiums and discounts. AMS has published a similar net price distribution report for direct hogs since January 2010.