Errors mar cattle pricing system, agency reports
Knight Ridder News
The Billings Gazette
December 14, 2005
WASHINGTON - The federal government's mandatory system for reporting cattle prices, awaiting renewal by Congress, was plagued by inaccuracies, a watchdog agency reported this week.
The U.S. Government Accountability Office reported that more than half of the government's audits of meatpackers revealed inaccuracies, omissions or undocumented transactions, calling into question whether the reports fairly represented the market conditions that determine how much farmers receive for cattle.
"GAO found the accuracy of USDA's livestock market news reports is not fully assured," the agency said in the report, which was requested by Sen. Tom Harkin, D-Iowa, ranking Democrat on the Senate Agriculture Committee, and Sen. Charles E. Grassley, R-Iowa. The GAO is the investigative arm of Congress.
Although the beef industry has been following the issue most closely, it affects dairy farmers as well because the sale of dairy animals is the second-biggest source of income on dairy farms, behind milk, economists say.
The report comes as mandatory price reporting lies in congressional limbo. The program expired in October; the House has called for a five-year extension, but Harkin and others in the Senate have called for a one-year extension while officials sort out issues related to accuracy and transparency.
"The Government Accountability Office report shows that we had some serious flaws in the mandatory price reporting law that needed to be changed," Grassley said in a statement. "I hope now we can take these suggestions and make improvements to the law that will ensure family farmers get a fair price."
GAO investigators found that of the 844 audits the USDA conducted of meatpackers during a three-year period, 64 percent had inaccuracies or missing information. And while the USDA said the number of inaccuracies was small for the amount of information collected, the GAO reported that the USDA also identified 46 instances with 22 meatpackers sending erroneous information that might affect the accuracy of the government's livestock market reports.
Some packers did not promptly fix problems identified by the USDA, the GAO found.
The GAO also reported that the USDA did not include all prices in its reports. In some cases, the report said, officials left out high and low prices that appeared to be aberrations but did not tell industry sources that some prices were omitted.
Among major recommendations, the GAO said the department should publicly report its audits of meatpackers and clarify its instructions to meatpackers who provide information for the market reports, if Congress agrees to extend the program.
Industry groups such as the National Cattlemen's Beef Association support the program. The association's vice president for government affairs, Jay Truitt, said questions about the program's accuracy should not hold up its extension in Congress. "No one has said we shouldn't extend it at all," he said.
billingsgazette.com
Knight Ridder News
The Billings Gazette
December 14, 2005
WASHINGTON - The federal government's mandatory system for reporting cattle prices, awaiting renewal by Congress, was plagued by inaccuracies, a watchdog agency reported this week.
The U.S. Government Accountability Office reported that more than half of the government's audits of meatpackers revealed inaccuracies, omissions or undocumented transactions, calling into question whether the reports fairly represented the market conditions that determine how much farmers receive for cattle.
"GAO found the accuracy of USDA's livestock market news reports is not fully assured," the agency said in the report, which was requested by Sen. Tom Harkin, D-Iowa, ranking Democrat on the Senate Agriculture Committee, and Sen. Charles E. Grassley, R-Iowa. The GAO is the investigative arm of Congress.
Although the beef industry has been following the issue most closely, it affects dairy farmers as well because the sale of dairy animals is the second-biggest source of income on dairy farms, behind milk, economists say.
The report comes as mandatory price reporting lies in congressional limbo. The program expired in October; the House has called for a five-year extension, but Harkin and others in the Senate have called for a one-year extension while officials sort out issues related to accuracy and transparency.
"The Government Accountability Office report shows that we had some serious flaws in the mandatory price reporting law that needed to be changed," Grassley said in a statement. "I hope now we can take these suggestions and make improvements to the law that will ensure family farmers get a fair price."
GAO investigators found that of the 844 audits the USDA conducted of meatpackers during a three-year period, 64 percent had inaccuracies or missing information. And while the USDA said the number of inaccuracies was small for the amount of information collected, the GAO reported that the USDA also identified 46 instances with 22 meatpackers sending erroneous information that might affect the accuracy of the government's livestock market reports.
Some packers did not promptly fix problems identified by the USDA, the GAO found.
The GAO also reported that the USDA did not include all prices in its reports. In some cases, the report said, officials left out high and low prices that appeared to be aberrations but did not tell industry sources that some prices were omitted.
Among major recommendations, the GAO said the department should publicly report its audits of meatpackers and clarify its instructions to meatpackers who provide information for the market reports, if Congress agrees to extend the program.
Industry groups such as the National Cattlemen's Beef Association support the program. The association's vice president for government affairs, Jay Truitt, said questions about the program's accuracy should not hold up its extension in Congress. "No one has said we shouldn't extend it at all," he said.
billingsgazette.com
