GAO Finds Problems with Livestock Mandatory Price Reporting

Findings confirm problems with accuracy and transparency in USDA price reports. Compiled by staff

Published on: Dec 12, 2005

A new report from the Government Accountability Office on the Livestock Mandatory Price Reporting program confirms the need for legislative reforms requiring USDA to improve the operation of the program.

The GAO report, USDA Has Taken Some Steps to Ensure Quality, but Additional Efforts Are Needed, found that many meat packers did not report data to USDA correctly and that in some instances packers failed to file price reports altogether. Such gaps in reporting can affect the accuracy of price reports provided to livestock producers and result in incorrect market information for buyers and sellers of livestock.

The report was requested by Sens. Chuck Grassley, R-Iowa, and Tom Harkin, D-Iowa, will now work with the House to implement the suggestions made in the report and address other livestock producer concerns.

"I requested this report because producers are concerned USDA is not doing enough to make sure price reports are accurate and timely," Harkin says. "GAO found that many times these price reports are inaccurate and that USDA is not letting the public know when it finds late or incorrect information."

"The Government Accountability Office report shows that we had some serious flaws in the Mandatory Price Reporting law that needed to be changed," Grassley says. "I hope now we can take these suggestions and make improvements to the law that will ensure family farmers get a fair price."

The Livestock Mandatory Price Reporting Act requires packers, processors, and importers to provide critical price, contracting, supply and demand information to USDA, which uses the information to create price reports for livestock producers.

The Senate unanimously passed legislation introduced by Grassley and Harkin in September extending the Livestock Price Reporting Act for one year in order to allow producers and other interested parties to review the GAO report before extending the law for a longer period. Because the House of Representatives did not take up this one-year extension bill for consideration, the Livestock Mandatory Price Reporting program expired on September 30. Instead, the House passed a five-year extension, but the Senate has been unwilling to pass the longer-term extension until the problems in the price reporting system identified and investigated by GAO are adequately addressed. The program has been operating as a voluntary program since that time. 

The report revealed the following:

  • GAO observed lengthy lag times by USDA in correcting problems when packers failed to report or provided incorrect information. GAO evaluated 844 audits and found that packers incorrectly reported or failed to report required information 64% of the time. On many of these audits it showed that USDA, on average, was taking roughly 85 days to ensure a packer made needed corrections to the information.     
  • Coordination between the Agricultural Marketing Service (AMS) and the Grain Inspection, and Packers and Stockyards Administration (GIPSA) has been limited, hindering GIPSA's ability to monitor and correct trends of anti-competitive behavior that could negatively affect price reports. This is in part due to the lack of legal authority for GIPSA to review company specific information. GIPSA is better equipped to review longstanding patterns of anti-competitive behavior whereas AMS' goal is primarily to ensure price information is collected and quickly turned around for daily and weekly price reports.
  • USDA has been adjusting or excluding packer data but not making this practice known to livestock producers and the public.     
  • Since the enactment of the reporting program in 1999, USDA has yet to collect any penalties from packers for violations of program requirements even in cases of longstanding violations.     
  • Packers are not consistently and reliably reporting data to USDA within deadlines specified by the LMPR Act.
  • When USDA audits reveal violations of the LMPR Act, USDA has not been providing this information to the public, which undermines the overall transparency of the program.