The Iowa Cattlemen’s Association is concerned with changes the CME Group is making to cattle futures contracts.
One of those changes is the addition of a seasonal discount of $1.50 per hundredweight on cattle delivered to the Worthing, South Dakota delivery point.
The discount will be effective with the October 2017 contract, which will be listed on August 22nd.
Iowa Cattlemen’s Association C-E-O Matt Deppe says that action will create a “marketing disadvantage” for Iowa cattle feeders.
Deppe says the decision “feels like a mandate” on how and when people should feed cattle for market.
He also believes the move may decrease cash negotiated trade in the upper Midwest.
A news release from CME said the discount will better align delivery values with cash market prices and result in little or no impact on local cash cattle prices.
In the same release, CME said it will also consider moving to a cash settled live cattle futures contract if price discovery and cash negotiated trade in the cattle industry do not increase.