8:00 am - 12:00 pm • Ballroom
NCBA Live Cattle Marketing Committee
Jerry Bohn, Chair; Luke Lind, Vice Chair

As has been the case during many of this year’s Cattle Industry Annual Convention meetings, bovine spongiform encephalopathy (BSE) influenced discussion among members of NCBA’s Live Cattle Marketing Committee. In their Friday morning session, committee members responded to proposed changes to rules governing trading of live cattle and feeder cattle futures contracts.

The Chicago Mercantile Exchange (CME) is asking the Commodity Futures Trading Commission to change the rule limiting the amount by which futures prices may move, higher or lower, in a given day’s trading. CME claims the current limit of $1.50 per hundredweight (cwt.) does not allow the futures market to keep pace with cash market volatility like that seen following the discovery of BSE in this country.

In the wake of the BSE announcement, the CME did use its discretionary power for emergency expansion of limits on a temporary basis. According to CME representative Paul Peterson, that action was necessary to allow futures trade to move relative to the cash market. However, the CME is seeking to increase the standard $1.50 limit to $3.

Seeking middle ground, the Live Cattle Marketing Committee forwarded a resolution supporting a $2 limit. The resolution further stated that after two consecutive days of limit-up trading, or limit-down trading, the maximum allowable price change could increase to $3. The maximum limit could remain at that level, until there is no limit move in price, and then revert to $2.

In other action, the Committee renewed a resolution opposing application of USDA quality grade symbols to imported beef. Members also forwarded a new resolution calling for nationwide standardization of regulations pertaining to truck length and widths for vehicles used on federal, state and county roads.

— by Troy Smith