NCBA Votes To Reevaluate Price
Reporting Policy In Year 2000

DENVER — Key segments of the beef industry would have 18 months to show that they are cooperating with the provisions of voluntary "complete" price reporting, under the terms of a resolution adopted at the summer National Cattlemen’s Beef Association meeting.

After 18 months, if those key segments are found not to be cooperating, the policy says NCBA will work toward making price reporting mandatory.

The new policy, adopted after much stronger action was taken by the U.S. Senate on mandatory price reporting, will be a moot point if the Senate action prevails in the final version of the federal agriculture appropriations bill. NCBA is on record opposing mandatory price reporting.

According to the organization’s resolution, NCBA will review the progress toward "complete" price reporting at its annual convention in 2000. If the data indicate that the voluntary system doesn’t meet standards yet to be set by the association, the resolution recommends that NCBA: make policy to seek mandatory price reporting and develop legislation that defines who must report, determines classes of cattle to report, defines noncompliance penalties and procedures and sets statutory authority.

The resolution also asks that immediate mandatory volume and price reporting be achieved for boxed beef and beef imports and exports.

NCBA says the resolution evolved from a report by its "Price Discovery Task Force." The recommendations to the industry for improving the voluntary price reporting system include: developing a grid pricing system with a negotiated base price; "complete" voluntary reporting; more objective measurements for defining cattle value.

The idea behind more complete reporting is to learn the price paid for captive supply cattle, which includes cattle that are forward contracted or sold to packers on a formula basis. According to USDA, an estimated 30 percent of live cattle sold annually are considered captive supply and the price paid for those animals is not reported in the daily live cattle trade.

(That quoted percentage is out of date today and has been for months; as long ago as last spring, captives routinely accounted for four out of every 10 fed cattle traded, and the figure has run as high as 70 percent in some areas. — Ed.)

"The evidence doesn’t suggest that mandatory price reporting will by itself significantly improve or change the value of price information we are generating with the voluntary system in use today," said Task Force Chairman Roger Stuber. "However, the Task Force recognizes that there is a strongly held perception that today’s voluntary price reporting system is inadequate, especially in regards to captive supply cattle."

(Translation: "We still don’t intend to do anything about this situation, but to buy time and pacify all those people bleeding red ink and screaming for someone’s head, we promise to talk about it again — in a year and a half." — Ed.)