New Online Cattle Auction Debuts
There’s a new online auction that could shake up the U.S. pricing model for cattle, reports globalpost.com. The auction made its public debut last week after a test run, with the support of the world's largest meatpacker. Exchange-operator CME Group Inc said the online auction was an effort to improve cattle futures after complaints about extreme volatility.
Cattle future cash sales have been dropping off for years. And the cash and futures markets have come under scrutiny over pricing. Terry Duffy, executive chairman of CME, said, "The industry needs to work a little harder to figure out how they're going to get more liquid in the cash trade."
Duffy added that he was concerned about the decline in cash sales because futures contracts need a viable underlying cash market to function properly. The cash and futures markets have fallen from record levels reached in 2014. CME may also reduce trading hours and take other steps to improve cattle markets.