COLUMN: Restoring ranchers’ faith in the cattle markets

WASHINGTON -- When more than 50 ranchers take time out of a busy day to talk about high-frequency trading, you know you've got a problem in the cattle markets.

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WASHINGTON -- When more than 50 ranchers take time out of a busy day to talk about high-frequency trading, you know you’ve got a problem in the cattle markets.

Volatility in the cattle futures market has hurt North Dakota ranchers and their families, as well as the state’s economy, since agriculture is 25 percent of our economic base. The folks the futures market is supposed to work for - ranchers who raise cattle - are losing faith that the market is a useful tool to mitigate their risk. They’re concerned that outside traders in Chicago or New York are speculating in the markets, driving volatility and unpredictable prices.

An unpredictable market that confounds our ranchers is a huge problem for workers who are just trying to do their jobs. In the U.S. Senate, I’m fighting to make sure ranchers can once again trust the market and use cattle futures contracts to protect their bottom line.

To help ranchers get answers, I held a cattle forum in Dickinson last month and brought together ranchers, industry leaders, and a representative from the CME Group - the organization that oversees the cattle futures market. With our panel in the livestock ring of Stockmen’s Livestock Exchange and ranchers in stands encircling the ring, I led a two-hour panel discussion and question-and-answer session with ranchers and community members.

The cattle forum gave ranchers a chance to share their concerns directly with someone who oversees this market. The event also gave David Lehman, the CME representative I brought to North Dakota, a chance to explain what they are doing to promote market integrity.


The CME has cut down on trading hours and is working on new circuit breakers to stabilize the market, Lehman said. But ranchers are worried those changes won’t be enough.

“We’ve got a broken leg, and you’re trying to throw a couple Band-Aids on it,” one rancher said at the cattle forum.

After a period of high prices in 2014, the cattle market fell dramatically in the fall of 2015, and since then the markets have been unpredictable. That’s been tough on ranchers and tough on folks throughout our state.

Restoring faith in this market isn’t just essential for North Dakota ranchers. It’s essential for our entire state, because our economy is driven by commodities like the world-class cattle that North Dakota ranchers raise. If our ranchers and farmers face tough times, rural communities and businesses on Main Street feel the pain, too.

Last week, the U.S. Senate Committee on Agriculture held a hearing I requested to examine the top challenges in the livestock markets - and it was a promising step in my efforts to address this problem. The feedback I heard from ranchers at the cattle forum was instrumental in explaining to my U.S. Senate colleagues how this market volatility is hurting our ranchers.

At the hearing I introduced Joe Goggins, a Montana rancher and industry leader who testified about challenges in the livestock market. Goggins often works auctions in North Dakota, and explained to the committee how price volatility in the cattle market impacts his business. He also discussed the need to update old laws to reflect new market realities.

And the U.S. Senate is finally starting to take this volatility seriously. Just last week, the U.S. Government Accountability Office - a federal watchdog - agreed to investigate the extent to which high-frequency trading of cattle futures contracts is contributing to price fluctuations.

It was important to get a representative from CME out to North Dakota last month to talk with ranchers. Hearing from them reinforced that the cattle futures market is nothing without the cattle that our ranchers work hard to raise.


Take out the cattle, and traders speculating in the cattle futures market are just gambling. With the faint smell of cattle wafting through the livestock ring last month, that lesson was hard to forget.

Heitkamp is a Democrat representing North Dakota in the U.S. Senate. Contact her at

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