(iowapolitics.com) -- Senator Chuck Grassley today [Tuesday] joined the chairman and ranking member of the Senate Agriculture Committee to keep a fair and level playing field for independent producers in the livestock markets.

"It's imperative that this law be extended before it expires or it's likely the packer interests will be playing loose with the numbers and independent producers across Iowa will be left in the cold," Grassley said. "Transparency in the market place is critical for fair and accurate reporting."

The mandatory price reporting legislation will extend reporting requirements of livestock daily markets for five years and makes three changes to existing law. The new bill calls for mandatory reporting of wholesale pork cuts to help expand transparency to the pork industry and provide additional protection to producers. In addition, it adds pork to the list of commodities whose exports must be reported. The bill also instructs the Secretary of Agriculture to establish within one year an electronic price reporting system for dairy products.

Grassley said that concerned Iowa livestock producers were a major factor in passing the original law in 1999. Since then, Grassley has sought to improve the law to increase integrity and accountability of the reported prices.

Sort & Cull Comments: With mandatory price reports scheduled to expire on September 30, the clock is definitely ticking on the much-needed repairs noted by Senator Grassley. I vigorously applaud the first two proposals, the former a bit more than the latter.

As many of you know, I have long mourned the sad state of wholesale pork reporting. Why this important market was ever allowed to dodged the initial harness of mandatory report is a mystery that ranks right up there with nuclear fusion and the loyalty of Chicago Cub fans.

How do I hate the current carlot report? Let me name the ways: it's unreliable, poorly tested, subject to manipulation, inconsistent, untrustworthy and totally useless in terms of risk management. I trust you get my drift.

But if packers are forced to report all of the pork business on a timely basis, producers and market analysts stand to gain significant tools of marketing, price assessment and demand measurement. For example, if producers can truly depend on an accurate assessment of carcass value, they will gain another viable option in formulating live inventory and contracts. And those choosing to negotiate one business day at a time will benefit from a more reliable picture of processing margins.

The change incorporating export business is also a good one, though less likely to impact short-term market behavior. We've been reporting weekly beef exports for year, and it's high time that the government supply the same critical service for the pork industry. Needless to say, foreign demand for U.S. pork only stands to become more and more crucial in the years ahead.

As long as they have MPR up on the lift, I would suggest one more change. Market watchers need to get a meaningful handle on the scheduling of contracts. Again, the current system is far more responsive to beef producers than pork counterparts.

While cattlemen are updated each week as to the scheduling of forward contracts as far as six months out or more, hog producers never know anything official in terms of packer coverage beyond 14 days. At one time, GIPSA attempted to collect and distribute such information via the "Swine Contract Library." Unfortunately, packers are no longer required to report to this program. But even when the law helped in collecting contract data, reports were only issued on a monthly basis.

Contract supplies make a huge difference in shaping packer demand. Mandatory reporting could open a big picture in this regard. Tinkering legislators with little "gut-feel" on how livestock markets work need to know these things.

Although I appreciated Senator Grassley's urgent rhetoric, his passionate call-to-arms seemed bemusing given Washington's sharply honed skills of delay and procrastination. You'll recall that the last time the MPR charter expired (i.e., September 30, 2005), it continued to operate on a non-authorized basis for nearly 13 months.

That awkward period of limbo was called by many "voluntary mandatory," a silly contradiction that somehow seemed to work thanks to packer refusal to "play loose with the numbers."

For more Harrington comments check out
www.feelofthemarket.com

(AG)

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