National Milk Producers Federation is calling for the USDA to a change the reviewing protocols of product pricing and inventory data it collects. Recently, it was discovered that nonfat dry milk prices have not been reported accurately in monthly government surveys.
The USDA last week said that the National Agricultural Statistics Service (NASS) had been collecting price data on nonfat dry milk sales that did not accurately reflect current market prices for the product. NASS officials will now go back 52 weeks to review pricing data for other nonfat dry milk sales in an attempt to clarify the veracity of its historic pricing data. Those reported prices are part of the information used to calculate the price that farmers receive each month in their milk checks.
Back in October 2000, Congress passed legislation requiring the reporting of dairy product inventories and prices. The law gave the USDA the authority to require dairy manufacturing plants to report any data having an impact on product prices, including both sales and products stored in inventory. That data was to be subject to mandatory reporting and auditing. NMPF was the lead organization pushing Congress to pass a law giving the government additional product data collection capabilities.
But because of confusion and delays over the intent of the legislation, the NASS still does not have the full ability to audit such data, meaning the accuracy of its current reports may be suspect. Such was the case in 2000, when a warehouse reporting error resulted in a 32% miscalculation in domestic butter stocks. A similar situation occurred in 1999, when millions of pounds of cheese suddenly appeared in the NASS cold storage report. Both errors resulted in a sharp drop in farm-level milk prices.