August 23, 2016

Dakotafest Question for the CME: What’s a Steer Worth in Worthing, SD?

There’s been a ‘burr under the saddle’ of many cattlemen in the Northern Plains since word came out earlier this month from the Chicago Mercantile Exchange – saying that producers will begin paying a ‘seasonal discount’ on live cattle that are delivered to the Worthing, South Dakota sales barn against the October 2017 futures contract.

The CME announced August 5th that a $1.50 per hundredweight discount would begin with trade starting next Monday, August 22nd.  The move is widely opposed by cattle producers.

During a ‘Capitol Hill Update’ from South Dakota’s Congressional delegation at Dakotafest in Mitchell, on Wednesday, an audience member asked Republican Senators Mike Rounds and John Thune, and Republican Representative Kristi Noem what they might be able to do about the issue.

The responses…

Senator Rounds

Representative Noem

Senator Thune

The CME said the  new measures are based on “continued collaboration with and feedback from the cattle industry as well as the results from an independent study conducted by Informa Economics.”

The CME said – based on extensive customer feedback, internal review and Informa’s independent research, CME Group will add a seasonal discount of $1.50 per hundredweight on live cattle tendered to its Worthing, South Dakota delivery location for the October contract only. The new discount will be effective with the October 2017 contract, which will be listed for trading on Monday, August 22, 2016, pending CFTC review. The extensive research supporting this decision concluded that this discount would better align delivery values with cash market prices and maintain compliance with CFTC’s policy on location price differentials, while resulting in little or no impact on local cash cattle prices. The full Informa Economics report, Regional Cattle Price Differences and Their Impact on CME Live Cattle Delivery Points, is available at www.cmegroup.com/livestockupdates.

 

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DakotaFest Begins In Mitchell, SD Today

The weather is warming up just in time for Dakotafest, which  getting underway in Mitchell, South Dakota today.  Rusty Halvorson visited ahead of the show opening with Samantha Castro, Marketing Manager for IDEAg Group, LLC.

Dakotafest Begins

The show opens at 9am each day.

Minnesota Farmfest and Dakotafest are properties of IDEAg Group, which is wholly owned by the American Farm Bureau Federation.
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Trade Proponents Say Now Is The Time To Push For Trans-Pacific Agreement

PNWFarm groups refuse to throw in the towel on the Trans-Pacific Partnership, despite a continued spate of negative headlines on the huge trade deal’s chances to be considered in a lame-duck Congress.  The only good news for TPP is President Obama’s announcement last week that he will push for its passage this year.

Then came House Speaker Paul Ryan’s comment that he sees no point in bringing up the Trans-Pacific Partnership since it lacks the votes to pass.

So where is the deal?  Former Trade Chair and long time ag senator Chuck Grassley of Iowa when asked this week about Senate Majority Leader Mitch McConnell’s bringing up the pact…

Grassley TPP

That’s assuming Clinton is elected.

When asked for comment, a spokesperson for the National Cattlemen’s Beef Association dismissed the naysayers. That followed a July comment by NCBA official Kent Bacus…

Baucus TPP

American Farm Bureau trade adviser Dave Salmonsen agrees, saying agriculture cannot throw in the towel:

Salmonsen TPP

As for Speaker Ryan’s rhetorical question, ‘what’s the point?,’  Salmonsen and Bacus argue the point is, there’s no point in waiting —not after the harsh anti-trade campaign rhetoric of both Clinton and Trump.

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