The Chicago Mercantile Exchange plans to launch stocker cattle futures and options on Nov. 30.
It could be a good tool for cow-calf producers and it complements what is happening in auctions.
“They decided 800,000 cow-calf producers in the U.S. need something,” said market analyst Herb Locke in Edmonton.
Canadians traditionally have stayed away from this kind of marketing choice but Locke said calves are coming from larger herds and a new generation of producers are moving into the game.
They are looking for more choices and may be willing to try a program like this.
Stocker cattle are young animals that are grazed on pasture until they gain enough weight for placement into feedlots.
The proposed exchange contracts specify 25,000 pounds of 500-to-599 lb., medium frame No. 1 feeder steers and medium and large frame No. 1 feeder steers. They will be cash-settled to the Chicago Mercantile Exchange Stocker Cattle Index, a seven-day weighted average of United States agriculture department prices.
