-iMcasterFj 106 NCA views oil beef pricing and reporting systems told WASHINGTON, D.C., ~ Beef pricing and reporting systems need certain im provements as the industry continues to change; but, in the main, the current systems have relected changes in supply and demand and have served the industry and consumers well. This was pointed out today by the National Cattlemen’s Association. In testimony before the U.S. Department of Agriculture’s Beef Pricing and Reporting Task Force. No valid evidence has been presented to support allegations that beef prices have been illegally manipulated, NCA said, and proposed legislation im posing government controls on the beef marketing system would create more problems than they would solve. NCA’s views and com ments, presented by Marketing Committee Chairman Tom Remington, were based on an extensive analysis of industry developments and allegations about beef pricing which have been made by politicians and others. The task force’s Washington hearing was the last of a series held before the task force reports to USDA, which will use the information and advice in responding to legislative proposals. NCA the task force included: The task force should note that there is no valid evidence that prices have been illegally manipulated or that prices reported by the reporting services have been inaccurate. The task force should recommend against any attempt, legislation or regulation, to have govern ment force new marketing, pricing or reporting systems upon the industry. It should oppose H.R. 91, introduced by Congressman Neal idatums to Smitb-a bill which would put all aspects of meat marketing under govern ment regulation. As the wholesale beef market continues to evolve from a carcass to a fabricated (boxed) beef market, new price reporting tods need to be developed. WeSi ialize In Aerial Poles In Stock.. 25’. 30’, 35’ 4 is one possible innovation, and its refinement and testing should,be encouraged, hut not to die exclusion of other potential marketing systems. Significant structural changes are occurring in the beef industry. USDA should do more to provide timely information to the industry such as monitoring and periodically reporting the extent of formula vs. negotiated selling of beef carcasses and fabricated cuts. Here are additional points brought out by NCA; Despite actual or alleged shortcomings of the present pricing and reporting systems, the systems have reflected long and short term changes in supply and demand. Consumer beef supplies have been relatively dependable; changing supplies have been rationed or liquidated by changes in prices. The Kfjfclf CLEANING SYSTEMS ON-SITE CLEANING cold water washers Sales-Service-Rentals PARTS WASHERS associated chemicals HOT HIGH-PRESSURE WASHERS STEAM CLEANERS Kochel Equipment Co. BOX 2138 -RDHI ELVERSON PA 19520 (215) 469-9685 ELECTRICAL \ CONTRACTING \ Specializing In GRICULTURAL WIRING io Residential. Industrial nd Commercial Work. Free Estimates. €. M. HIGH CO. Box 175 RO2 Myerstown, PA 17067 Phone: 717-866-7544 current free market should be allowed to continue to evolve and operate with a minimum of government interference. With a rapid increase in use of boxed beef and other fabricated products, the wholesale beef trade is becoming much more than just a carcass beef trade. Analysis of data on sales qualified to be used in reporting carcass beef prices shows that the reporting services are doing a creditable job of measuring that portion of graded* carcass beef traded in carlots on a negotiated basis. Based on data from ' USDA’s recent beef pricing report, the Yellow Sheet sample represented about 24 per cent of qualifying sales. However, the advent of central fabrication and formula pricing are diminishing the validity of carcass beef prices as the basis for the entire market. Meanwhile, USDA’s beef {Hieing report does not substantiate the allegations of impropriety against the . reporting services, including the Yellow Sheet. The packing industry now has substantial excess capacity. With some plants much less efficient than others, plant closings and packer failures will present a significant problem. The possibility of growing concentration in the packing industry is a valid concern. However, current con centration of beef slaughter is less than existed in the 1950's and 1960'5. Approximately two-thirds of the carcass beef is sold on a formula basis (with prices based on reporting service qqptetions on day of sale). However, carcass beef now represents, at most, only half of the wholesale beef trade. The other lialf is sold as fabricated beef, of which 85 per cent is sold on a negotiated basis. At a minimum, 55 per cent of the total wholesale beef trade involves negotiated pricing or much more than sonte critics and politicians have claimed. For many smaller packers and buyers, formula buying or selling, involving standing orders, is an economical way to trade beef. At this time, NCA cannot support a ban on formula pricing, but feels that the basis for price reporting needs to be enlarged. Within a few years, the carcass beef .trade will become predormnatly a raw ,product market for fabricating operations. What' will be needed most in price reporting is an expanded and comprehensive reporting system for fabricated cuts. Mandatory reporting of all meat trade, with more government control and red tape, would create more rather than fewer problems for the industry and the public. Attempts to license market new publications also would present problems. Establishment of an ex clusive government reporting service would provide the potential for political manipulation of prices. 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