USDA wants to add DDGs to required weekly export sales report

By Kris Bevill | March 27, 2012

The amount of distillers dried grains (DDGs) and pork being exported by U.S. producers every year continues to rise, but information on sales and shipments currently lags the actual export transactions by about two months, which can make it difficult for commodity markets to react to export activity, according to the USDA’s Foreign Agricultural Service. Therefore, the agency has proposed adding pork and DDGs to the list of commodities covered by the Export Sales Reporting Requirements. If the rule is finalized as proposed, all exporters of those products would be required to report weekly export sales and provide information related to the quantity, destination and marketing year of the sales to the FAS.

In its proposal, the agency said adding pork and DDGs to the list of required commodities will improve market transparency and enable commodity markets to better adjust to changing export activity because export information would be made available within two weeks of the activity, rather than two months after the transaction. “Exports of these two products have grown significantly in recent years,” Suzanne Heinen, acting administrator of the FAS, said in a statement. “Exports of DDGs were about 2 million tons in 2007 and reached about 8 million tons in 2011. And U.S. pork exports reached about 2 million tons in 2011, which is double what it was five years ago.”

Exporters of U.S. grains have been required to report their export activity since the 1970s, when Congress mandated export sales reporting requirements after the Soviet Union made huge, unanticipated purchases of U.S. wheat and corn in 1972, causing a run-up in prices and depleting U.S. reserve stocks, according to the FAS. Because there were no reporting requirements in place for exports prior to the Soviet grain purchase, it was believed that large grain companies had an advantage over the public in that situation because they had more information on future prices and grain trade trends. The Export Sales Reporting Requirements were enacted to essentially level the playing field and ensure that the public would have access to current information on commodities designated by the USDA.

Comments are being accepted on the proposed addition of pork and DDGs to the export reporting requirements rule until May 7. Comments may be submitted via the Federal Register