The Livestock Mandatory Reporting Act of 1999 (Act) established a market information program to provide market participants and others readily understandable information with respect to the marketing of livestock and their related products. The Act authorizes the Secretary of Agriculture to make reasonable adjustments in information reported by packers that would distort market conditions or price levels to the detriment of market participants.
Accordingly, Livestock and Grain Market News, through diligent and reasonable review of the data provided by packers, publishes information representative of the livestock and meat traded and excludes those transactions from the reports that would distort general market conditions or price levels.
Data Validation Process
Following submission, information received from packers is automatically screened by the Livestock Mandatory Reporting (LMR) electronic reporting program. Based on established criteria, certain transactions are flagged automatically by the program to be excluded during the generation of market reports. These pre-defined criteria are described below.
In addition to the automatic review of submitted data, Market News reporters examine incoming records and select transactions for additional review. If there is an obvious error that can be corrected by the reporter, the correction is made and the transaction is included in market reports. If an apparent data error cannot be corrected by the reporter, the packer is contacted to resolve the issue. If the issue can be resolved and the transaction otherwise is eligible for inclusion, it is included in market reports. The most common reasons that Market News reporters mark transactions to be excluded from publication are price aberrations notably lower or higher than the bulk of the market due to discounts or premiums for weight, quality, yield or dressing percentage; inferior livestock; or mixed classes of livestock in the same lot.
Policies that automatically exclude transactions from preparation of market reports include the following:
- Record previously reported
- Record submitted before it was priced
- Unable to verify data accuracy with plant
- Confidentiality guidelines not met
- Information not required to be submitted (such as auction purchases, which packers are not required to report)
There also are established policies for excluding transactions for particular categories of commodity transactions:
For the daily cattle purchases of slaughter steers and heifers, all transaction lots containing 10 head or less are excluded.
The carlot pricing standard for most individual cuts and ground beef items is 500 pounds, with 20,000 pounds for 50% beef trimmings and 90% boneless processing beef. Transactions with a volume less than the minimum are included in the report, providing they fall within the price range established by the carlot standards. All beef cuts, cow cuts, ground beef, beef trimmings, and boneless processing beef transactions are included provided there is adequate support in the market. Adequate market support is determined by assessment of other packers trading the same product at similar price levels, close alignment with the price movements and price ranges for related products (e.g., commodity trim inside rounds vs. closely trimmed inside rounds), historical price ranges for individual products, and current overall and specific product market conditions.
For live negotiated barrow & gilt purchases, lots of less than 10 head are excluded, as are lots that are discounted for non uniform live weight.