September 2005 - Although there is still a lot of work needed to be done in order for the Livestock Mandatory Reporting Act (MPR) to be re-authorized for five years, the U.S. sheep industry received good news at the end of July when the House Agriculture Committee approved legislation to do so. The next step is consideration by the full U.S. House of Representatives and action by the U.S. Senate.
As for the Senate, agriculture committee leadership are not yet recommending re-authorization of MPR until the Government Accountability Office (GAO) finishes an investigation into the integrity and accountability of prices reported under its provisions. Unfortunately, that report is not expected until later this year; however, the current bill is set to expire September 30, 2005.
We may find ourselves facing a similar situation to that of last fall when a one-year extension did not happen in a timely matter, despite American Sheep Industry Association (ASI) contacts with Congress early in the year. Lamb companies did provide price information for several weeks waiting for Congress to implement a one-year extension of MPR. The reason the industry supports a five-year extension is so we do not have market uncertainty every year waiting on congressional authorization.
I have provided a statement to the Senate Agriculture, Nutrition and Forestry Committee, and we have also joined forces with the National Pork Producers Council, the National Cattlemen?s Beef Association, the American Farm Bureau and the American Meat Institute in a letter with this request.
MPR was initially enacted in 1999 with detailed provisions included for hog and cattle reporting and a simple authorization for the secretary of agriculture to provide rulemaking for a mandatory lamb system. As the rules were developed for cattle and hogs, the secretary included proposed rules for a lamb system and the program was implemented. The start-up was a long process; however, as confidentiality concerns raised by meat organizations forced changes to the rules, it was late-2001 before any price reports existed in the industry. The lack of price reporting ? voluntary or mandatory ? is one factor blamed for poor live-lamb prices in mid-2001 through mid-2002.
MPR has been a valuable tool for our industry since its implementation. We have successfully made changes in the program with the most recent being the addition of wholesale prices of imported lamb, initiated in January of this year. This is an important benefit of MPR. Not only does it provide additional transparency to U.S. lamb-meat markets, but in fairness to U.S. companies that carry the expense of price reporting of American product, now so do the foreign and domestic companies handling foreign lamb.
MPR has also been of importance for the American Lamb Board as it led to a study of the retail-price series of lamb. This retail series is the only avenue available to the industry because prior to the study under MPR, retail prices of lamb meat had not existed since the 1980s.
In addition, it should be noted that ASI is using the database of prices collected under the mandatory MPR for a model that we have provided the Federal Crop Insurance Corporation to base a Livestock Price-Risk Protection Program for lamb. Without mandatory MPR, it would be unlikely that we could seek a pilot program for price protection for lamb like those that have been implemented for beef and hog producers.
In an attempt to not risk market disruption and create price volatility in lamb should MPR become a voluntary system, I urge sheep producers to ask your senators to re-authorize MPR for five years and do it promptly as the deadline is October. It is very costly for the industry to switch between systems and is a key reason why re-authorization is a priority for ASI legislative efforts.