Editor’s note: NGFA relies heavily on its 18 active committees and councils to address significant issues related to public policy and industry business. As such, NGFA has launched a series of profiles looking at the committees, their priorities and leadership to keep members up-to-date on current issues. A new committee will be featured each month in the “Committee Corner” based on association priorities.
Committee Name: Risk Management
Committee Chairman: MJ Anderson, Director of Risk Management and Merchandising, The Andersons Inc., Maumee, OH
NGFA Staff Liaison: Todd Kemp, Vice President for Marketing/Treasurer
Committee Members: Below is a list of committee members as of July 24:
- John Ade, Perdue AgriBusiness LLC, Salisbury, MD
- Eric Bowles, Macquarie Commodities, New York, NY
- Patrick Coyle, Nidera US LLC, Chicago, IL
- John Cripe, MID-CO Commodities Inc., Bloomington, IL
- Bill Doyscher, Farmers Cooperative Elevator Co., Hanley Falls, MN
- Burton Etchison, Stewart Grain Company Inc., Williamsport, IN
- Jeffrey Hainline, Advance Trading Inc., Bloomington, IL
- Robert Jones, ABN AMRO Clearing Chicago LLC, Chicago, IL
- Diana Klemme, Grain Service Corporation, Atlanta, GA
- Brian Kubik, Cargill Inc., Wayzata, MN
- Brian Liedl, United Grain Corporation, Vancouver, WA
- Terry Linn, The Linn Group, Chicago, IL
- Scott McWilliams, Lansing Trade Group LLC, Overland Park, KS
- Bruce Nelson, INTL FCStone LLC, Wdm, IA
- Eric Perry, The Scoular Company, Overland Park, KS
- Ed Prosser, Gavilon Grain LLC, Omaha, NE
- Nathan Reding, Zen-Noh Grain Corp., Covington, LA
- Rick Romer, CHS, Inver Grove, MN
- Steve Strong, Bunge North America Inc., Saint Louis, MO
- Charles Tsatsos, J.D. Heiskell & Co., Elkhorn, NE
- Wesley Uhlmeyer, Archer Daniels Midland Company, Decatur, IL
In addition, Matthew Blasdel, INTL FCStone LLC, Zionsville, IN, is involved with the committee currently as a participant in the NGFA’s Committee Apprentice Program.
Committee Purpose: This committee represents the interests of commercial hedgers in interacting with the grain exchanges, the Commodity Futures Trading Commission and Congress in urging the adoption of policies that create an environment where cash and futures markets can remain efficient, sound and viable for agricultural users. The committee serves as a liaison with the commodity exchanges and futures markets on issues important to NGFA members and commercial hedgers. It also develops educational materials, as needed, for industry use.
Major Current Committee Activities: The committee currently is focusing on the following major issues:
- CFTC’s Speculative Position Limit Proposal: More than two years ago, the CFTC proposed a rule that would implement the Dodd-Frank requirement to establish position limits for a broad range of commodities. The proposal would change the manner in which position limits are established for grain and oilseed futures contracts. Even more concerning is a proposal to redefine bona fide hedging – the CFTC proposal would significantly narrow the range of hedging strategies that would qualify for bona fide hedge treatment. The NGFA has been working closely with CFTC to advocate for the right sort of position limit regime and for rewriting the proposal so hedgers using futures can retain the tools they need for business risk management.
- CFTC Reauthorization: Every five years, Congress passes legislation to reauthorize operations of the CFTC. However, the commission has been operating without legislative authorization for the past two years. The NGFA is working with House and Senate Agriculture Committees to pass legislation that will provide customer protections and needed end-user fixes. Priorities for the NGFA include codifying the residual interest fix approved earlier this year by CFTC; easing unfeasible recordkeeping requirements under Section 1.35 of the Commodity Exchange Act; and clarifying that anticipatory hedging meets the definition of bona fide hedging.
- CFTC Vacancy: For over a year, one of the five CFTC Commissioner seats has been vacant. The NGFA has led a coalition of national groups from production agriculture and agribusiness to advocate that the next nominee should have some background in and understanding of issues important to the industry.
- EFP Regulation/Audits: The committee continues work with the CME Group to ensure that new regulations governing Exchange-for-Physical transactions are consistent with industry practice and workable. The committee has conducted numerous conversations with CFTC and the CME Group to clarify audit priorities in efforts to ease the regulatory burden on market participants. The committee also works closely with the CME Group on other issues like contract terms, trading hours, and other exchange policies.
- Electronic Trading/High-Frequency Trading: A committee task force currently is working with a CME Group working group to clarify CME policies/procedures and to inform and educate on issues surrounding electronic trading and HFT and their impacts on markets.