USDA and Merc Will Discuss Delviery Bottlenecks

Cattlemen on the NCBA Futures Working Group are addressing delivery bottlenecks as part of the association’s efforts to make improvements to the live cattle futures contract.  The Working Group is a subcommittee of the Price Discovery Think Tank appointed last spring by NCBA President Wythe Willey. 

In discussions with the Chicago Mercantile Exchange, the Exchange felt this issue needed to be resolved before discussions could expand to include other topics such as heifer delivery. Bottlenecks, for whatever the reason, can result in cattle not being graded and sent back to feed, thereby increasing transportation costs and shrink loss.

On Oct. 7, Bryan Dierlam, NCBA’s director of Legislative Affairs, met with John Van Dyke and Weldon Hall, both with the Livestock and Seed Program with USDA’s Agricultural Marketing Service.  Both have a role in overseeing the grading of deliveries.  They expressed a desire to work with NCBA and the CME to resolve these delivery bottleneck problems and to work to better understand the total capacity available for deliveries with regards to futures contracts. 

NCBA is scheduling an early November meeting with USDA and the Chicago Mercantile Exchange to discuss solutions to the bottleneck problem.