The cattle industry’s top minds are meeting this week in Washington, D.C. with representatives from the CME Group to discuss possible strategies for fixing the volatility being seen in both live and feeder cattle futures contracts as well as the cash market. Farm Director Ron Hays spoke with National Cattlemen’s Beef Association’s Colin Woodall, vice president of Governmental Affairs, who will be at the meeting and says futures have become much less reliable as a risk management tool for producers. He says this is an issue that has been in the works for some time now.
“We have cattle producers from all segments of our industry and from across the country and town this week, to really focus on three things,” Woodall said. “The primary focus is on the volatility that we are seeing in the CME Group’s cattle futures contracts. We have to get that addressed.”
In addition, Woodall says the working group will discuss what changes if any to contract specifications can be made that might help alleviate some of the issues causing the problem, and will also broach the subject of price discovery and the overall strength of the cash market. He mentioned that all three commissioners of the Commodity Futures Trading Commission would be in attendance and included in the discussion as well.
After some less than progressive talks with CME during the two organizations’ last few meetings, Woodall says NCBA’s leadership is looking to bring some policy and legislative help into the conversation. Hence, the expected presence of the trade commissioners.
“We’ve had to change our approach a little bit,” Woodall said. “It’s obvious that just working with the CME is no longer going to give us the access to the data that we had hoped for so that’s why we have already gone to the Commodity Futures Trading Commission, and why we invited all three commissioners to join us.”
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