The CME Group’s proposed $1.50 discount on live cattle delivered to Worthing, South Dakota has upset many producers. They say it’s unfair and would result in an average discount of $21 on an 1400 pound steer. The CME Group Managing Director of Commodity Research and Product Development Dave Lehman says the discount will only be applied in October and is not intended to be disparaging to cattle producers in the region.
He says they aren’t targeting this delivery point. They’re looking at Worthing for the change because historically a majority of the deliveries against the live cattle contract have been at that northern most location.
Lehman says the heavy deliveries in Worthing during October have a depressing effect on the cattle market throughout the country. And so they’re just trying to get the price back on par.
He says they welcome producer input and have extended the comment period for this proposal to April 4.
