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CATTLEMEN TO ADDRESS USDA’S FAULTY PRICE REPORTING

WASHINGTON — The National Cattlemen’s Beef Association (NCBA) met with U.S. Department of Agriculture (USDA) officials on Monday, May 21, to address several initial concerns raised as the result of the agency’s inaccurate price reports on beef cut-out values.

Due to a technical error in the computer program for the USDA’s Mandatory Price Reporting System, the boxed beef cutout and primal cut values reported in the National Daily Boxed Beef Cutout and Boxed Beef Cuts reports for April 3 through May 11 may have been incorrectly calculated.

The Agricultural Marketing Service (AMS) is in the process of recalculating the boxed beef cutout values from April 3 through May 11, and primal cut values from April 3 through May 15. AMS will post the recalculated values in a future National Daily Boxed Beef Cutout and Boxed Beef Cuts report. Corrections of boxed beef cutout values for May 14 through 15 have been issued. The calculations for boxed beef cutout and primal values beginning May 16 are correct.

"The National Cattlemen’s Beef Association is disappointed and outraged with the USDA Agricultural Marketing Service’s error in reporting boxed beef cut-out values," said Lynn Cornwell, NCBA president and a Montana cattle producer. He noted that beef producers may have used the inaccurate information for six weeks prior to the USDA’s announcement earlier this week reporting that the numbers were incorrect.

Thousands of contracts and cattle sales rely on the information in the reports, which were stating lower than market value prices for the sales.

This mistake questions USDA’s integrity and threatens producer confidence in the marketplace, according to Cornwell. Potentially, it could cost producers millions of dollars. According to USDA officials, products that were not quality-graded, known as "no-roll," were mistakenly included into prices reported for select and choice box-beef. USDA attributes the error to a software problem.

Other concerns addressed by NCBA in its meeting with USDA included:

1. USDA’s plans to address losses experienced by producers.

2. NCBA’s need for assurances and guarantees that future prices reported will be accurate and truly reflective of the market.

3. Information on when the problems started and correct information on prior marketing information to allow producers to accurately define their losses.

4. Assurances that NCBA will be informed of other potential system weaknesses.

Cornwell says NCBA will work with USDA and Congress to ensure that price reporting is implemented consistent with the intent of Congress so producers have the confidence to make proper marketing decisions.

Boxed beef cutout and primal cut values may be accessed at http://www.ams.usda.gov/lsg/mncs/ls_mpr.htm. For additional information please contact AMS Public Affairs Kathryn Mattingly at (202) 720-8998.

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