Frustration is growing among cattle producers who have watched the market historically erode before their eyes. Wall, South Dakota cattle producer Myron Williams is part of a group working on solutions with the CME, regulatory agencies and lawmakers. He says the cattle market is broken due in part to the move to electronic futures trade and high frequency trading.
He says the volatility in the futures is part of the problem, but another issue is the retail beef price hasn’t come down as fast as the price of cattle. Lawmakers are calling for hearings in early 2017 to address these issues, but Williams says it may be too little too late.
Williams was one of 30 cattle producers that met with lawmakers, the CFTC and the CME in Washington to find a solution. He says they agreed the lack of market transparency and negotiated cash cattle trade are at the heart of the issue, but isn’t sure there will be any positive changes.
Williams says calf prices are down nearly $1,000 from last year at this time and fed cattle have dropped more than 60-percent from their highs. As a result, that may put some producers out of business.
