CME makes new rules for cattle delivery
Dec. 7, 2015
by MEAT+POULTRY Staff
CHICAGO – CME Group Inc. will soon require that all cattle delivered against the live cattle contract must be born and raised solely in the United States. The rule change goes into force Dec. 18, and it covers futures contracts listed through April 2017.
CME aims to clarify existing live cattle futures delivery rules in the event the US Senate and US Dept. of Agriculture repeal the country of origin labeling (COOL) law for beef and pork.
“The amendments are being made as the timing of legislation and a final United States Department of Agriculture rule repealing COOL for beef and pork has not been determined, but we believe it important to provide certainty to the marketplace as to existent requirements,” CME said in a special executive report released Dec. 4. The purpose of these rule changes is to maintain the status quo in an uncertain policy environment, since the current US origin requirement is dependent on COOL being in place.”
CME added it plans to hold discussion with the industry on whether cattle not born in the US should be allowed for delivery against the CME live cattle futures contract for contract months subsequent to April 2017. CME intends to suspend listing additional live cattle futures and options contract months until a decision is made.
Canada and Mexico are seeking permission from the World Trade Organization to impose more than $3 billion in tariffs against the US for failing to repeal COOL. The WTO is due to release its ruling this month.