Harrington's Sort & Cull
John Harrington DTN Livestock Analyst

Friday 08/17/12

Better Late Than Never

The dark ages of the wholesale pork trade are finally coming to an end.

After nearly two years of study, negotiation and planning, the USDA actually announced Friday the final rule that implements mandatory wholesale pork reporting, as required by the Mandatory Price Reporting Act of 2010.

The final rule outlines what information packers will be required to submit to the USDA Agricultural Marketing Service (AMS), how the information should be submitted and other program requirements. The rule requires packers to submit the price of each sale, quantity, and other characteristics that AMS will use to produce market reports that will be disseminated to the public.

Maybe there's a few out there who are thinking "Don't we do all that already?"

Actually, I'm shocked by the number of producers and market watchers who believe that current pork quotes published by Market News deserve the same respect as the vast sea of beef quotes that gush from the Mandatory floodgates each business day.

Many are shocked to learn that the price data used to estimate the daily pork carcass value is solely provided on a voluntary basis with absolutely nothing to vouch for its timeliness and accuracy except the good will and character of packers (no comment).

For some mysterious reason, when the Livestock Mandatory Reporting Act of 1999 was passed, the new legal net of fact gathering did not include wholesale pork prices. Only two or three years ago did private and public powers that be finally see the wisdom of this no-brainer.

Notice of the final rule will be published in the Aug. 22, 2012, Federal Register and the program will be effective on Jan. 7, 2013.

But don't think that means your handle on the real pork trade will be transformed as soon as the first of the year.

Not so fast. This is the government at work, not Usain Bolt or Michael Phelps.

As soon as "practical" after the final rule has been published, AMS will hold a training session to assist packers in meeting the requirements of the mandatory pork reporting program.

Well-placed sources tell me that such training, as well as the necessary coordination of computers and software, could easily take another three to six months.

My guess is that we'll be lucky to see the first set of official quotes based on real-time trade by Memorial Day 2013.

But I'm certainly not complaining. We've come too far and waited too long to throw any kind of silly tantrum now.

Once producers can truly rely on the accuracy of wholesale prices, a host of new marketing options may surface. Options are very important, especially with the cash hog market dying on the vine.

It's great news for independent producers. Better late than never, I guess.

http://www.feelofthemarket.com/…

(AG)

Posted at 4:48PM CDT 08/17/12 by John Harrington
Comments (1)
This looks good, but everything gets played over the "hedge" by Commodities Brokers playing "Bookie" with the quadrillions of dollars "Dog Track" known as Derivatives. It's a multi-billion dollar betting window for the top of the heap. Billions, perhaps trillions were made on the Drought, for instance. It's good to see the Farmers getting SOMETHING back...this is "trickle down" at it's best.
Posted by Ric Ohge at 9:36AM CDT 08/20/12
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