ASI Provides Mandatory Reporting Comments
April 8, 2016

"A four-year drive by the American Sheep Industry Association to update price reporting to fit a changing lamb industry is nearing completion," stated ASI President Burton Pfliger. "This week, the association submitted comments supporting the final steps to regulations that will take affect this spring."

Current Livestock Mandatory Reporting rules and regulations and a consolidating sheep industry have resulted in a decrease in the amount of lamb market data that can be reported by the U.S. Department of Agriculture's Agricultural Marketing Service. This has reduced the amount of market information available to sheep and lamb producers and decreased market transparency compared to the early years of the LMR program. As the lamb sector has continued to become more consolidated and concentrated, it is apparent that periodic action to LMR Lamb needs to be taken to ensure useful market related data is reported.

AMS posted two separate Federal Register notices on Feb. 29 to further define LMR for lamb. The American Sheep Industry Association submitted its comments this week so that producers who wish to file their own comments can refer to ASI's. Comments must be submitted on or before April 29 to be considered.

Livestock Mandatory Reporting: Revision of Lamb Reporting Requirements - ASI supports reducing the reporting threshold for importers and packers by redefining the definitions of both.

Amending current importing thresholds to 1,000 metric tons per year (down from the current regulation of 2,500 metric tons per year) will better reflect current import volumes, global sheep and lamb dynamics and the projected import trend in the next five years. In addition, the proposed amendment will account for some future consolidation and/or declines in the number of importing parties or reductions in lamb import tonnages.

Current LMR regulations provide that a U.S. lamb packer is required to report under LMR if the plant processes an average of at least the equivalent of 75,000 lambs annually. However, the sheep and lamb industry has seen approximately a 35 percent decline in the number of available slaughter lambs during the last decade, which has been reflected in the number of lambs processed by companies reporting under LMR Lamb. The proposed adjustment of the threshold level down to 35,000 head would be in-line with the current status of the industry and possible trends for modest declines in the next five years while still reporting LMR on domestic lambs.

Using 35,000 lambs for domestic reporting is roughly equivalent to 1,000 metric tons of lamb meat for an importing threshold.

Livestock Mandatory Reporting: Reauthorization of Livestock Mandatory Reporting and Revision of Swine and Lamb Reporting Requirements - During the development of LMR Lamb, many definitions, guidelines and regulations that were established for beef served as a base for implementing LMR Lamb. After nearly 15 years of experience with LMR Lamb and significant structural changes in the sheep industry, it has become increasingly apparent that LMR Lamb needs to be amended in an effort to ensure useful market related data is reported under LMR.

ASI recommends the following definition revisions:
  • Lambs committed would be defined as lambs that are intended to be delivered to a packer beginning on the date of an agreement to sell the lambs.
  • The term packer-owned lambs means lambs that a packer owns for at least 28 days immediately before slaughter.
In the 2008 reauthorization, AMS deleted the definition for lambs committed in an effort to reduce the reporting burden on lamb packers. However, given the industry supply and market related issues in the last five years, having volume information on lambs that are committed to packers is needed to provide the industry with information on the number of lambs that are in the pipeline for delivery at a future point in time, as is currently being reported for cattle and hogs.

Similar to the lamb market, the pelt market and pelt marketing practices have changed considerably through the years. Current reporting does not reflect these changes, nor current pelt marketing practices; therefore, a revision to require packers to report price, volume and classification descriptors for all lamb pelts from lambs purchased on a negotiated purchase, formula marketing arrangement or forward contract basis is supported.

These proposed revisions should help reflect the objectives of reporting accurate and usable market information and data for lamb producers.

ASI's full comments, as well as the Federal Register notices, are available on ASI's website at www.sheepusa.org/IssuesPrograms_Issues_MandatoryPriceReporting.