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Expert: Errors caused loss of money
Professor says cattlemen out $42.8 million
By Scott Waltman
American News Writer
The magnitude of errors contained in U.S. Department of Agriculture boxed beef reports grew as time passed in spring 2001, an expert witness testified in a federal court case that continued Tuesday in Aberdeen.
As the errors got larger, they cost cattle producers more money, said Ted Schroeder, a professor at Kansas State University.
"It's very clear that there is a strong relationship between boxed beef prices and fed cattle prices," Schroeder said.
Whether that's true is key in a lawsuit filed by three cattlemen - including a Herreid man - two and a half years ago. They contend that the nation's four largest meat packers knowingly used erroneous USDA boxed beef reports to pay less to farmers and ranchers for their live cattle.
Schroeder said he studied transactions made between large packers and cattle producers between April 2 and May 11, 2001, to determine that producers were short-changed as much as $42.8 million.
The days in April and May were the days the USDA issued incorrect boxed beef prices.
As an expert witness, Schroeder is paid for his testimony. Because of his credentials, he's allowed to offer his opinions as evidence, something most witnesses can't do.
Schroeder said that his studies show that once the USDA started reporting the right boxed beef prices, the price paid by packers for live cattle was forced up considerably, even to the point where some were making more than $80 per head of livestock, a considerable amount.
Attorneys for the packers, however, said the the six-week span Schroeder studied was not long enough to show what actually happened. The profit margin for packers is volatile with drastic ups and downs, they said.
Packer attorneys also said that the prices of boxed beef - the product generally shipped to grocery stores and restaurants - often peaks during the grilling season. That's why they said the higher prices of boxed beef in spring and summer shouldn't be surprising.
The defense also pointed out that Schroeder completed an initial study that showed a loss to cattle producers of only $22 million. They said his second report with a higher potential damage total was only compiled because he didn't properly compile and test his first report.
Schroeder said his second report, which doesn't use data from before and after the time when boxed beef prices were misreported, is more accurate.
The USDA reporting errors were the result of a computer program that included low-quality meat when determining the boxed beef prices of better cuts. It is not disputed that the packers are not responsible for the error.
Schroeder will be on the stand again today. Testimony is scheduled to begin at 9 a.m. at the federal courthouse in downtown Aberdeen. Herman Schumacher, a Herreid auction barn owner and one of the plaintiffs, will likely testify later in the day.
Cattlemen Michael Callicrate of Kansas and Roger Koch of Nebraska are the other plaintiffs.
The defendants in the case are Tyson Fresh Meats, Excel Corp., Swift & Co. and National Beef
Professor says cattlemen out $42.8 million
By Scott Waltman
American News Writer
The magnitude of errors contained in U.S. Department of Agriculture boxed beef reports grew as time passed in spring 2001, an expert witness testified in a federal court case that continued Tuesday in Aberdeen.
As the errors got larger, they cost cattle producers more money, said Ted Schroeder, a professor at Kansas State University.
"It's very clear that there is a strong relationship between boxed beef prices and fed cattle prices," Schroeder said.
Whether that's true is key in a lawsuit filed by three cattlemen - including a Herreid man - two and a half years ago. They contend that the nation's four largest meat packers knowingly used erroneous USDA boxed beef reports to pay less to farmers and ranchers for their live cattle.
Schroeder said he studied transactions made between large packers and cattle producers between April 2 and May 11, 2001, to determine that producers were short-changed as much as $42.8 million.
The days in April and May were the days the USDA issued incorrect boxed beef prices.
As an expert witness, Schroeder is paid for his testimony. Because of his credentials, he's allowed to offer his opinions as evidence, something most witnesses can't do.
Schroeder said that his studies show that once the USDA started reporting the right boxed beef prices, the price paid by packers for live cattle was forced up considerably, even to the point where some were making more than $80 per head of livestock, a considerable amount.
Attorneys for the packers, however, said the the six-week span Schroeder studied was not long enough to show what actually happened. The profit margin for packers is volatile with drastic ups and downs, they said.
Packer attorneys also said that the prices of boxed beef - the product generally shipped to grocery stores and restaurants - often peaks during the grilling season. That's why they said the higher prices of boxed beef in spring and summer shouldn't be surprising.
The defense also pointed out that Schroeder completed an initial study that showed a loss to cattle producers of only $22 million. They said his second report with a higher potential damage total was only compiled because he didn't properly compile and test his first report.
Schroeder said his second report, which doesn't use data from before and after the time when boxed beef prices were misreported, is more accurate.
The USDA reporting errors were the result of a computer program that included low-quality meat when determining the boxed beef prices of better cuts. It is not disputed that the packers are not responsible for the error.
Schroeder will be on the stand again today. Testimony is scheduled to begin at 9 a.m. at the federal courthouse in downtown Aberdeen. Herman Schumacher, a Herreid auction barn owner and one of the plaintiffs, will likely testify later in the day.
Cattlemen Michael Callicrate of Kansas and Roger Koch of Nebraska are the other plaintiffs.
The defendants in the case are Tyson Fresh Meats, Excel Corp., Swift & Co. and National Beef
