ND Department of Agriculture
Testimony

April 14, 2000

John E. Van Dyke
Chief, Livestock and Grain Market News Branch
Room 2619-S
1400 Independence Avenue
Washington, DC 20250-0252 

Dear Mr. Van Dyke:

I would like to thank the United States Department of Agriculture (USDA) for the opportunity to comment on the proposed rule for Livestock Mandatory Reporting (Docket No. LS-99-18).

The North Dakota Department of Agriculture supports the implementation of the Livestock Mandatory Reporting Act as a means of providing North Dakota producers with more reliable, complete and timely market information. Meat animal production is the 2^nd largest sector of the agricultural industry in North Dakota, accounting for 10.9% of agricultural cash receipts. Thus, livestock mandatory reporting (LMR) is very important to our producers and our state.

The pricing system of the livestock industry has changed drastically in the last several years. Forward contracting, oral contracting, and a wide host of private marketing agreements between feedlots and packers have created an increasingly difficult environment for producers to effectively compete in the market.

We need a livestock mandatory reporting program that provides the public with timely, accurate livestock market information, while placing no undue burden on the livestock processing industry.

I commend USDA for the prompt issuance of the proposed rule and for the 30-day comment period. USDA noted in background materials that the mandatory livestock reporting program

should be operational by "mid to late summer." I urge USDA to adhere to this timeline. The time allotted should be sufficient to review comments on the proposed rule and integrate needed changes.

I urge USDA to consider the following recommendations before issuing a final rule on the livestock mandatory reporting program:

• Audit procedures for reviewing reported information need to be defined and enforced.

The Livestock Mandatory Reporting Act provides that:

"…The Secretary shall make information obtained under this subtitle available to the public only in a manner that –

(1) ensures that the information is published on a national and a regional or statewide basis as the Secretary determines to be appropriate;…"

It is appropriate and imperative that reporting information be aggregated down to, at a minimum, regional levels. I would encourage USDA to utilize current Market News outlets and regional USDA-Agricultural Marketing Services (AMS) offices to gather and distribute this information.

The Livestock Mandatory Report Act gives the Secretary discretionary authority to determine the level at which information is distributed. Concerns regarding proprietary information can clearly be protected while still reporting down to the regional and state levels. Reporting information solely at the national level defeats much of the usefulness of the information and does little to improve the transparency of the markets. Producers need access to information that more accurately reflects prices and markets in their region and state.

I commend USDA for including the requirement of electronic reporting in the proposed rule. The electronic submission of data will increase the timeliness and effectiveness of the program as it reduces paperwork, speeds transmission of information, and allows for expeditious dissemination of the reported information.

Producers must be able to readily access the information provided through the Livestock Mandatory Reporting program. The information must be accurate, complete, and clear. The information should be made available via the Internet, regional USDA-AMS offices, and Market News outlets.

I understand that the scope of information collected by Market News outlets may become duplicative of the mandatory reporting requirements in some areas of the country. In North Dakota, that is not the case. Market News provides important voluntary reporting information from the livestock auction markets and I would like to see that service continue.

The information gathered through the LMR program should be automatically transmitted to GIPSA for their information and review.

The mission of GIPSA is to:

"facilitate(s) the marketing of livestock,…meat,…and related agricultural products and promote(s) fair and competitive trading practices for the overall benefit of consumers and American agriculture."

I would encourage USDA-GIPSA to establish a systematic review process of the reporting information in order to ensure fair and competitive markets for livestock.

The information provided through the LMR program will be critical in maintaining a transparent and competitive marketplace for livestock producers. It is imperative that the reporting information received is as accurate and complete as possible.

Therefore, I encourage USDA to establish, define, and enforce an audit procedure for reviewing reported information through the LMR program.

The establishment of the Livestock Mandatory Reporting program is an important step for the livestock industry in our country and I commend USDA for its work on the promulgation of proposed rules.

Let me re-emphasize that regionalized reporting is critical to the success of this program. Further, the workings of the program must be finalized with accuracy, timeliness, and accessibility in mind.

Thank you in advance for the consideration of my comments. I look forward to working with you to ensure the success of the Livestock Mandatory Reporting program.

Sincerely,

Roger Johnson

Agriculture Commissioner

RJ:pe

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