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Discussions continue on cattle futures volatility

Addressing volatility in the cattle futures market continues to be a top priority of the National Cattlemen’s Beef Association (NCBA).

“We continue to hear outcry from our membership across the country that the volatility, and the velocity of that volatility, is too great—and that the futures contracts are not as an effective risk management tool as they once were,” says Colin Woodall, NCBA’s vice president of government affairs.

The volatility issue is the focus of a meeting this week in Washington, D.C. of the NCBA/CME cattle marketing working group. Woodall says they will be joined by commissioners of the Commodity Futures Trading Commission.

“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,” Woodall says. “So that’s why we have already gone to the CFTC and why we invited all three commissioners to join us.”

Woodall says NCBA is determined to get to the root of the problem, “because we know that this is just making the downward market that we see right now, even worse”.

Woodall says the group will also discuss issues related to price discovery in the cash cattle markets.