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Nebraska cattlemen want more transparency in futures

Steve Sunderman led the discussion on cattle futures trading during the Nebraska Cattlemen marketing committee meeting in Broken Bow.

Steve Sunderman led the discussion on cattle futures trading during the Nebraska Cattlemen marketing committee meeting in Broken Bow.

Volatility in the cattle futures markets continues to be a concern for cattle producers.

At their mid-year meeting in Broken Bow, members of Nebraska Cattlemen (NC) passed an interim resolution calling for increased transparency in cattle futures and equal access to transactions and information related to trades.

NC marketing committee co-chair Steve Sunderman of Norfolk, who also serves on the NCBA/CME Working Group, says cattlemen want futures trading to be fair to everyone involved.

“When it comes to how we trade the futures on electronic trading platforms, we just want to have an equal playing field,” Sunderman says. “Hopefully that incentivizes good market behavior and makes it a more viable risk management tool for the producer.”

Although cattle futures have been less volatile than during the big market drop last fall, Sunderman says there’s still quite a bit of churn within the contracts.

“There are still concerns that the futures aren’t following fundamentals like they should be—that it isn’t quite as viable of a risk management took as we’d like,” Sunderman says. “So we’re really trying to work towards getting to a place where that can be the case.”

Sunderman thinks the NCBA/CME Working Group has made good progress towards addressing some of the issues with cattle future trading.

“We’ve had a very good working relationship with the CME,” he says. “Thing always go a little bit slower than what you would hope, but I think we’ve made a lot of progress. We’re now to the point that we’re really trying to come up with solutions that might improve what we’re seeing in the markets.

“When it comes to the cattle industry, as all producers know, there’s a tremendous amount of capital at stake. So we really need good, viable risk management tools to be able to operate in a safe and effective manner.”

AUDIO: Steve Sunderman

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