U.S. Grain Sales

Inventory Sales Raise Issues for Legislative Consideration Gao ID: RCED-90-120 May 22, 1990

Pursuant to a congressional request, GAO assessed whether the Department of Agriculture (USDA) received reasonable prices for the grain it sold during fiscal years 1988 and 1989.

GAO found that: (1) the overall policy USDA used for certificate exchange sales priced grain as close as possible to estimated local market prices; (2) USDA implementing instructions specified that exchange prices should be at or below estimated local market prices; and (3) USDA determined selling prices for exchange sales based on estimates of local market prices. GAO also found that: (1) USDA sale prices for 36 million bushels of grain averaged about 5 cents below local market prices; (2) it could not measure the reasonableness of the sale prices in relation to the need to reduce inventories; (3) USDA grain sales were instrumental in reducing costly federal grain inventories; and (4) the U.S. grain stock policy did not address such issues as inventory size, USDA authority to release grain stocks, or how to avoid future excessive inventories.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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