Delegates from the Iowa Cattlemen’s Association travel to Denver, Colorado this week for the National Cattlemen’s Beef Association’s Cattle Industry Summer Business Meeting. At the meeting NCBA’s policy committees will meet to review policies and discuss industry issues. On Saturday, July 16, NCBA will hold its board of directors meeting and Iowa’s cattle industry will be represented by ICA’s five voting delegates.
The Iowa delegates will ask for several changes in NCBA policy, with the goal of strengthening policy related to cattle marketing. ICA members strongly support measures that would make the live cattle futures contract more reliable as a risk management tool. Those measures include more cash negotiated trade in all major cattle feeding regions, enhancing the live cattle futures contract delivery process, and encouraging more engagement from NCBA on market issues.
ICA leaders will address cattle market policy at NCBA meeting
ICA’s grassroots policy development process began at the 2016 Regional “BeefMeets” meetings held on June 22, 23, 27 & 28 across the state. At the BeefMeets in Iowa, ICA members gathered and discussed industry topics and issues of concern.
One of the topics of interest was recent cattle market volatility. ICA members strongly support measures that will make the live cattle futures contract more reliable as a risk management tool. Those measures include more cash negotiated trade in all major cattle feeding regions, enhancing the live cattle futures contract delivery process, and encouraging more engagement from NCBA on market issues.
ICA stands united on policy to reduce cattle market volatility
“ICA members are strongly opposed to the proposed $1.50 per hundredweight discount on cattle delivered to the Worthing, SD delivery point. This issue, among others, requires involvement of NCBA’s Cattle Marketing and International Trade Committee, led by ICA past president Ed Greiman. We intend to express our members’ interest to leaders of this policy committee,” says Phil Reemtsma, current ICA president. “Our goal is to strengthen NCBA’s policy related to CME Live Cattle Futures Contracts to make sure we stand united as an industry on issues that will reduce cattle market volatility.”
The following policies were adopted by the ICA board of directors after analysis and review by ICA’s Feedlot Council and Cattle Production policy committee. ICA delegates attending the Denver meeting will represent Iowa cattle producers by following the guidance laid out in these policies.
CP-LCM-31 Chicago Mercantile Exchange (CME) Live Cattle Futures Contracts
WHEREAS, fed cattle futures provide an important risk management tool for Iowa cattlemen; and WHEREAS, cattle feeding in Iowa continues to enjoy a resurgence because of ethanol co-products and feed availability—THEREFORE, BE IT RESOLVED:
1. That ICA opposes any changes by the Chicago Mercantile Exchange (CME) that would adversely affect Iowa cattle feeders’ ability to deliver on CME contracts;
2. That the CME allow heifers to be delivered to meet futures market obligations;
3. That the CME set the weight specs consistent with carcass and live delivery and applicable to current industry weights;
4. That the CME continue the existence of the Worthing, South Dakota delivery point for CME Live Cattle futures contracts and reject any discounting of cattle delivered to the Worthing, South Dakota delivery point;
5. The CME add more delivery points for cattle on the Live Cattle Futures Contract;
6. The CME avoid creating a cash settled Live Cattle Futures Contract;
7. The CME increase transparency, level access to information, and transactions, and foster an environment that builds confidence in the ability to use the Live Cattle Futures Contract; and
8. That NCBA retain staff and budget resources to investigate and represent cattle industry issues to the CME.
CP-LCM-44 Increasing Price Discovery
WHEREAS, the Iowa cattlemen who sell their cattle on the open market rely on competitive price discovery to get a fair price for their cattle; and WHEREAS, most independent Iowa cattlemen wish to avoid vertical integration that is evident in the pork and poultry sectors; and WHEREAS, the popularity of packer formula pricing based on the weighted average limits negotiations on the open market—THEREFORE BE IT RESOLVED:
* ICA work with its membership as well as NCBA to encourage and educate producers in all major cattle feeding regions to market 50% or more of their cattle on negotiated cash trade for their benefit as well as that of the beef industry.
* ICA and NCBA encourage members to utilize voluntary price reporting of fed cattle prices.