Risk Management

By Todd Kemp, Senior Vice President, Treasurer As reported in last week’s NGFA Newsletter, the Commodity Futures Trading Commission (CFTC) on Jan. 30 voted to publish a new proposal designed to implement one of the final remaining pieces of Dodd-Frank legislation that was signed into law 10 years ago. NGFA’s initial staff analysis of the proposal finds much to support. The proposal would implement speculative position limits on a range of commodities on which such limits have not been imposed previously. For grain and oilseed futures contracts, which have had position limits for ... Read More

The Commodity Futures Trading Commission (CFTC) voted 3-2 on Jan. 30 to publish for public comment its latest position limits proposal – the agency’s fourth such attempt since the Dodd-Frank Act was enacted in 2010. CFTC Chairman Heath Tarbert emphasized in a statement issued after the vote that the proposal will protect agricultural markets from excessive speculation, but “just as importantly,” will ensure fair access. The proposal would cap speculative positions in the covered derivatives contracts to help prevent “cornering and squeezing,” Tarbert said. The proposal also would end the ... Read More

The Center for Risk Management Education and Research at Kansas State University unveiled a new executive education program designed for professionals with risk management responsibility. The inaugural two-and-a-half-day conference will be conducted April 14-16 in Manhattan, Kan., and is targeted at senior-level executives and managers, especially in the food and beverage, food processing/manufacturing, consumer packaged goods, and pet food sectors. Detailed program and registration information can be found here. Now in its seventh year of operation, the center previously has focused ... Read More

The CME Group on Dec. 2 issued a Special Executive Report (SER) announcing increases in exchange transaction fees for CBOT agricultural futures and options effective Feb. 1, 2020. Generally, futures and options transaction fees are scheduled to increase by 3 cents for individual and equity members of the exchange for both open outcry and Globex trades. The announced changes are summarized in this table.  The SER from CME announcing fee changes for agricultural trades and other CME contracts can be accessed here. ... Read More

By Todd Kemp, Senior Vice President, Treasurer In an increasingly rare display of bipartisanship, the House Agriculture Committee on Oct. 30 unanimously approved legislation to reauthorize the operations of the Commodity Futures Trading Commission (CFTC) through 2025.  The bill (H.R. 2895) is the product of collaboration between committee Chairman Collin Peterson, D-Minn., and ranking member Mike Conaway, R-Texas. Committee members noted during the business meeting to approve the bill that the CFTC has been operating without congressional authorization since 2013. While ... Read More

By Todd Kemp, Senior Vice President of Marketing and Treasurer The House Agriculture Committee this week released a discussion draft of legislation that would reauthorize the Commodity Futures Trading Commission (CFTC), which has been operating without congressional authorization for several years.  While the lack of authorizing legislation has had no appreciable impact on the agency’s work, such a bill often is a vehicle for Congress to express its will on policy matters and to codify and clarify CFTC policies. The draft legislation would authorize CFTC operations for ... Read More

Heath Tarbert, who officially began his term as the chairman of the Commodity Futures Trading Commission (CFTC) on July 15, took the time to answer several questions posed by NGFA about the rulemaking agenda for the agency under his leadership. Tarbert was nominated by President Trump and approved unanimously by the Senate Agriculture Committee before being confirmed as chairman by the Senate in June with a broad, bipartisan vote of 84-9. The NGFA authored and coordinated a letter signed by 25 national production agriculture and agribusiness groups in support of Tarbert’s confirmation, ... Read More

By Todd Kemp, Senior Vice President The Internal Revenue Service (IRS) on June 19 published long-awaited proposed rules to provide guidance on Section 199A of the U.S. tax code.  This particular proposal by the IRS addresses primarily the deduction for qualified business income of producers who are patrons of a cooperative, as well as Section 199A calculations for cooperatives. An additional set of final IRS regulations, published in early 2019, more clearly defined entities eligible for the Section 199A deduction. The June 19 proposal includes a 60-day public comment period, with ... Read More