April 7, 2000

Amid growing concerns of packer concentration, USDA published a proposed mandatory livestock price reporting rule March 17 that spells out who is required to report, what information must be reported, and specific reporting times. The rule is open for public comment for 30 days.

The rule is aimed at livestock packers, product processors and importers, who slaughter an average of at least 125,000 cattle, 100,000 swine, or 75,000 lambs per year. Importers who annually import an average of 5,000 metric tons of lamb meat are also required to report.

The rule was issued before a USDA report issued March 27 that said consolidation and low-cost labor have helped large firms dominate the meat packing industry.

Using Census Bureau data, USDA said the meat packing industry has experienced a substantial increase in plant size, while there has been an equally dramatic decrease in the number of plants.

USDA said four firms handle nearly 80 percent of all steer and heifer slaughter. Twenty years ago, concentration was half that.

The report also finds that the largest hog and cattle packers can deliver meat to buyers at costs 3 percent below those of plants only a quarter as big.

"Such changes in beef packing, and to some extent pork packing, have raised concerns about industry competition both in Congress and within farm groups," USDA said in a news release.

According to USDA’s proposed rule, at stipulated times of day, affected packers, processors and importers must report to USDA the details of all transactions involving purchases of livestock, domestic and imported lamb carcasses and imported lamb cuts. They must also report the details of transactions involving the following:

• Domestic and export sales of boxed beef cuts, including branded product.

• Sales of domestic and imported boxed lamb cuts, including branded product.

• Purchases of imported boxed lamb cuts, including branded products.

According to the American Farm Bureau Federation, mandatory price reporting will provide new information that has not been collected under the existing voluntary market news reporting program.