Beginning with deliveries on the October 2008 CME live cattle futures contract, all cattle in the delivery unit must be born and raised exclusively in the U.S., according to the CME. In addition, at the time of delivery, the seller must provide an affidavit attesting to the origin of the cattle being delivered.
Unlike other country of origin labeling (COOL) affidavits, the CME will require that the seller file a new affidavit every time they file for delivery, according to the CME’s Paul Peterson. As with other cattle complying with the new COOL requirements, cattle in the U.S. on or before July 15 are considered U.S. origin and can be delivered, he says.
In addition, several other changes will apply to deliveries on the October 2008 and subsequent contracts:
- Eliminate the requirement that the average weight of a par delivery unit must be between 1,100 and 1,425 lbs.
- Eliminate the requirement that individual steers at par must weigh no more than 100 lbs. above or below the average weight of the delivery unit.
- Eliminate the 3¢/lb. discount on individual steers weighing 100-200 lbs. above or below the average weight of the delivery unit.
- Add the ability to deliver steers weighing 1,475 lbs. to 1,550 lbs. at the same market-based discount used for 950-1,000 lb. carcass-graded deliveries.
- Clarify the procedures used by USDA for re-grading carcasses in carcass-graded deliveries so that carcasses in the top third of any quality grade except Prime are eligible for re-grade.
- Eliminate the ability to purchase replacement carcasses in the event that the total delivered live weight falls below 38,000 lbs.
- Make the language and penalties for failure to deliver in carcass-graded deliveries consistent with those used in live graded deliveries.
- Clarify the deadlines for the receiving long in a carcass-graded delivery to accept or reject Large Lot Delivery and for the clearing house to notify the delivering short.