Live Cattle Marketing Committee Passes New Resolution, Directive

The NCBA Live Cattle Marketing Committee met during the Cattle Industry Convention in Nashville, TN, and put forth a new resolution and directive. The new resolution pertains to CME Group Live Cattle and Feeder Cattle Futures Contract price limits. It states NCBA supports the use of expanded price limits following a limit-move event, but opposes formula-based variable price limits as a means to expand daily limits within the contracts. Formula-based limits can cause confusion, which could lead to less use of risk management tools.

The directive passed by the committee created a new working group that will focus on market information, transparency and reporting. The group will look more closely at eliminating the impacts of Livestock Mandatory Reporting (LMR) confidentiality guidelines to ensure live cattle market transparency; defining the key elements of a cattle contract library and associated LMR reporting to achieve more price transparency; determining the type and content of captive supply and other alternative marketing agreements that must be reported to USDA; reviewing the functions and intentions of the Packers & Stockyards Act relative to transparency; evaluating the need for additional research focused on further establishing regional levels of negotiated trade that provide robust price discovery; and reviewing current criteria that requires packing plants to participate in LMR and determine if changes to those thresholds are needed. Recommendations in these areas are to be provided by the working group at the 2022 Cattle Industry Convention in February.