News Update

News Update
Feb. 20, 2007

USDA Releases GIPSA Report

USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) released the “GIPSA Livestock and Meat Marketing Study” Feb. 16. The study, by RTI International, reports on the use and impacts of marketing arrangements in the livestock and meat industries.

According to USDA, overall, the report found that alternative marketing arrangements (AMAs) increase the economic efficiency of the cattle, hog, and lamb markets, and that these economic benefits are distributed to consumers, as well as to producers and packers who use AMAs.

The study, mandated by Congress in 2003, assesses the effects on the market of packer ownership of livestock more than 14 days in advance of harvest and examines alternative methods to procure and transfer livestock from farm to retail.

GIPSA contracted with RTI International to conduct an extensive study of the economic effects of AMAs on beef, pork, and lamb marketing channels. AMAs are methods by which livestock and meat are transferred through successive stages of production and marketing, and include forward contracting, packer ownership, and marketing agreements. The final report: (1) addresses the extent of AMA’s use; (2) analyzes price differences and short-run market price effects of AMAs; (3) measures and compares costs and benefits associated with spot or negotiated marketing arrangements and AMAs; and (4) analyzes the implications of AMAs for the livestock and meat marketing system.

RTI International was awarded the contract as the outcome of a competitive bidding process based on the best value to the government, which included proposed costs to do the study and the technical merits of RTI International’s proposal.

An interim report, released in August 2005, identified and classified AMAs and described their terms, availability, and reasons for use in beef, pork, and lamb market channels, from production to consumption. The most common marketing arrangements for livestock that are made 14 days before harvest include lot-by-lot contracts or forward contracts, marketing agreements that are contracts for multiple lots, and equity investments by packers in feeding animals referred to as “packer ownership.”

In December 2006, the report was sent to economic academics across the country for peer review purposes. Their comments have been incorporated into the report.

The interim and final reports, including peer reviewers’ comments, and additional information about the study are available on GIPSA’s web site (www.gipsa.usda.gov) by following the “Marketing Study” link.

— Information provided by USDA.

FDA Amends Animal Drug Regulations

Animal drug regulations have been amended by the Food and Drug Administration (FDA) to reflect approval of a new animal drug application (NADA) filed by Intervet, Inc., the American Meat Institute (AMI) reports.

According to AMI, the NADA provides for use of an additional dose of trenbolone acetate and estradiol implant used for increased rate of weight gain and improved feed efficiency in feedlot steers. To review the entire notice, go to http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-2580.htm.

Japan Halts Beef Imports from Tyson Plant

Japan ceased importing beef from Tyson’s Lexington, Neb., plant after discovering the meat shipment may have violated the age limit requirements outlined in the country’s trade agreement with the U.S.

According to The Japan Times, authorities suspended the import of 9 tons of frozen U.S. beef Feb. 16 after discovering the shipment contained two boxes of beef not listed in the attached sanitary certificate document.

U.S. officials told the Japanese news service the packages in question had been sent to Japan by mistake, and an investigation is under way. According to the article, this latest incident is expected to hurt U.S. requests for easing age requirements during its meeting with Japan scheduled for March.

ERS Releases Data

USDA’s Economic Research Service (ERS) has released several informative reports, including its regular feed outlook, livestock and meat trade data and the latest U.S. ag trade reports.

The feed outlook, available at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1273, examines supply, use, prices, and trade for feed grains, including supply and demand prospects in main importing and exporting countries. The report focuses on corn but also contains information on sorghum, barley, oats and hay.

The livestock and meat trade data set contains monthly and annual data for the past 1-2 years for imports and exports of live cattle and hogs, beef and veal, lamb and mutton, pork, broiler meat, turkey meat, and shell eggs. The tables report physical quantities, not dollar values or unit prices. Visit www.ers.usda.gov/Data/MeatTrade/ for the full report.

The latest U.S. agricultural trade data are also available from ERS. This new data product announces USDA’s monthly release of calendar year, fiscal year, year-to-date, and monthly value of U.S. farm exports, imports and trade balance. Visit www.ers.usda.gov/Data/FATUS/MonthlySummary.htm for more information.

— compiled by Crystal Albers, associate editor, Angus Productions Inc.