Commodity Futures Trading:

Preliminary Information on the Viability of the Cattle Futures Markets

RCED-87-83: Published: Jan 16, 1987. Publicly Released: Jan 16, 1987.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In response to a congressional request, GAO provided preliminary information on its study of the cattle futures markets.

GAO found that: (1) the cattle industry has suffered serious financial stress in recent years because of high interest rates, low cattle prices, and declining land values; (2) although the price of cattle today is twice what it was 20 to 30 years ago, the decline in the dollar's purchasing power has more than offset this price increase; (3) the Chicago Mercantile Exchange created the live cattle futures market in 1964, as a response to unstable prices and narrow profit margins; and (4) many within the cattle industry are uncertain of how to use the market or what its impact is on prices. GAO also found that: (1) the structure of the cattle industry has changed dramatically over the years; (2) 75 percent of the nation's beef cows live in herds of less than 200; (3) agricultural futures market mechanisms evolved primarily in response to unstable cash markets with wide price swings resulting from a glut of low-priced commodities at harvest time and high-priced commodities after harvest; and (4) there have been charges within the cattle industry that the cattle futures markets exert downward pressure on cattle prices.

Sep 5, 2018

Jul 19, 2018

Jul 18, 2018

Jun 26, 2018

Mar 22, 2018

Mar 16, 2018

Mar 15, 2018

Feb 27, 2018

Looking for more? Browse all our products here