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Inaccurate Price-Reporting by Packers, Report Says

posted on December 16, 2005

Hello, I'm Mark Pearson.

Two notable economic reports released by the government this week provided some upbeat news for consumers and investors.

*First, a record drop in the cost of gasoline in November pushed consumer prices down by the largest monthly amount in 56 years. That's helped keep inflation in check. *And the Commerce Department announced Friday that the broadest measure of global trade actually showed a slight improvement in the third quarter ... although the nation's annual trade deficit still is headed for record territory in excess of $700 billion.

We'll have more on global trade talks later in the program.

On the home front, a Congressional audit released this week of the livestock mandatory price reporting system was less than complimentary ... a finding that lends credence to critics who claim the programs needs to be revamped.


Inaccurate Price-Reporting by Packers, Report Says

Meatpackers provided inaccurate information on nearly two-thirds of price reports audited under USDA's Livestock Mandatory Price Reporting program.

A report by the Congressional General Accounting Office said the inaccuracies involved errors that included: not reporting cattle slaughtered, underreporting purchases, delays in providing sales information, price inaccuracies and misclassification of transactions.

The report said the errors  and the way USDA staff chose to issue the reports  affected cattle prices. The GAO said price-reporting staff in USDA's Agricultural Marketing Service would sometimes exclude prices reported for cattle buys, which affected USDA's average weighted price for a week by as much as $2.75 per hundredweight. In some instances, the report said, it took USDA up to 85 days to correct mistakes in reported prices.

Earlier this fall, before the report was released, Iowa Senators Tom Harkin and Charles Grassley effectively blocked a five-year renewal of the price-reporting law. This week the two senators said they now will push for a five-year renewal of the law if it includes the GAO's recommended changes to tighten controls on reporting and the speed in which errors in price reporting are corrected.

The price-reporting law was passed in 1999 as a way to appease farm groups and lawmakers who were pushing for a ban on packer ownership of livestock. The law was meant to provide livestock producers with understandable price reports on a broad range of sales.

As of last June, 116 packers of pork and beef were required to report prices under the act.


Tags: agriculture animals livestock meat news USDA