Ranchers: make your voice heard!

Jan 17, 2014

—Several proposals seeking stakeholder comments

It’s a new year and an election year at that, so the body politic—and the market equivalent—have lost no time in generating proposals that need producer commentary. Below are a trio of pending actions that have the potential to greatly impact ranching.

Sage Grouse comment period reminder

Comments need to be officially submitted to Oregon’s Bureau of Land Management (BLM) by Feb. 20 to have any weight in the final Sage Grouse decision. Joan Suther, BLM’s Project Manager for Sage Grouse in Oregon, said that individuals’ unique comments were paramount. “A specific, well-written comment is better than a thousand form letters.”

While Feb. 20 marks the deadline for comments in Oregon, it comes sooner for other states: Montana’s is Feb. 6; Nevada, California, Utah and Idaho share a deadline of Jan. 29; and Wyoming has the last deadline, March 24. More BLM public meetings are planned for Oregon: in Jordan Valley Jan. 22; and in Durkee on Jan. 23. Wyoming meetings will be held in February, with information posted on the Wyoming BLM website.

CME changes to live cattle

The Chicago Mercantile Exchange (CME) has drafted an initial proposal to accept heifers for delivery against Live Cattle future contracts. This has come after several industry groups, including the National Cattlemen’s Beef Association, approached CME in 2012 requesting the inclusion of heifers for delivery, as well as an increased weight range on deliverable steers. The increased weight on deliverable steers was granted—though not to the extent requested— last year, but the considerations on heifer inclusion has been slower to proceed.

Heifers have been traditionally excluded from deliverable cattle based on risks associated with them, particularly pregnancy and the associated hardbone/structural maturity that can occur with pregnancy. Recent data, however, shows that risk has been minimized with improvements in management.

CME is seeking stakeholder input on the potential to allow heifers as deliverable on live cattle contracts. The proposal can be read in full online by visiting dailylivestockreport.com/ and opening the Jan. 14 issue of the report.

Comments can be submitted via email to any of the following CME representatives:

• Jack Cook, Director, Commodity Research and Product Development; email jack. cook@cmegroup.com;

• Matt Herrington, Manager, Commodity Research and Product Development; email matthew.herrington@cmegroup.com;

• Thomas Clark, Director, Commodity Business Line Management; email Thomas. clark@cmegroup.com;

• Dave Lehman, Managing Director, Commodity Research and Product Development; email david.lehman@ cmegroup.com.

Comments must be submitted by Jan. 28.

More changes to futures contracts

The Commodity Futures Trading Commission (CFTC) is seeking comments from stakeholders involved with livestock futures on a proposed rule that will change the position limits for some select contracts, among them live cattle. Among other changes, the lower limit would be dropped on the last five days of a contract’s life, single month limits will be almost doubled, and changes to the “all months” limit will be made.

“Our take is that the proposed rule could have a significant negative impact on the level of liquidity in livestock contracts since it will cut the total number of contracts that a speculator may hold at any one time,” opined Steve Meyer and Len Steiner of the CME Daily Livestock Report.

“At the same time, it allows any one speculator’s more limited impact to be more concentrated into one contract month. We will not here make a case for either of those being good or bad but we think they are, in fact, the impacts.”

Meyer and Steiner pointed out that, regardless of one’s perception on speculators in the livestock futures markets, their presence is invaluable to the functioning of the market.

“Speculators make these markets by their willingness to take positions and thus accept the risk that hedgers are looking to lay off. Futures markets need speculators. If their impact is at times negative, then some limitations are advisable but the markets still need speculators. The question is whether the proposed limitations are a) better than the current ones and/or b) as good as they can be or need to be.”

The whole proposal can be read online by visiting cftc. gov/ and searching for “78 FR 75680.” The document is long and can be read either online as an HTML page or downloaded as a PDF document.

Comments are being accepted through Feb. 10 and can be submitted online by visiting comments.cftc.gov/ PublicComments/Comment Form.aspx?id=1436. You can get more information by contacting:

• Stephen Sherrod; email ssherrod@cftc.gov, phone 202/418-5452

• Riva Spear Adriance; email radriance@cftc.gov, phone 202/418-5494

• David N. Pepper; email dpepper@cftc.gov, phone 202/418-5565

Remember that comments submitted to the federal government become part of the public record and so will be made public. Do not include information in your comment that you would be uncomfortable being publically available. — Kerry Halladay and Traci Eatherton, WLJ Editors