Working to Address Market Volatility

The importance of the futures market as risk management for beef producers has been in the news and the National Cattlemen's Beef Association has a working group in place to work to resolve the issue of volatility in the futures market.

Colin Woodall, NCBA Vice President of Government Affairs, discusses NCBA's efforts to ensure the futures markets work for risk management

Woodall: "The CME has made it very clear to us that they want to fix these contracts and make sure that we are satisfied with the way these contracts work. That is why they are still at the table, that is why we remain at the table. It is important that we stay at the table to find the solution. The idea of taking these contracts and just moving them somewhere else, while may sound like a really good knee-jerk reaction — is not an action we'd want to see in this relationship and definitely in this overall effort. So that is why we want to make sure we continue to work with CME to find these true solutions because they are willing to help us. But that also means that we don't agree with every idea that they have. We make sure that we argue with them to some extent, coordinate with them to some extent but also bring in the government — the regulators such as the Commodity Futures Trading Commission — and the House and Senate Ag Committees which have oversight over the CFTC. They have been involved, and they will continue to be involved to make sure this entire issue is thoroughly studied and that whatever solution we come up with is one that the industry can live with it, the regulators and live with and CME can live with."