"Insurance companies which write policies under the USDA's Livestock Risk Protection program can take offsetting positions in CME feeder cattle and live cattle options to manage the risk of those policies," said CME Chairman Terry Duffy. "Our livestock options serve as an effective underwriting tool for the insurance policies offered under the government's program."
"USDA's Risk Management Agency began its innovative insurance program in 2001 for pork producers in Iowa," said CME President and Chief Executive Officer Jim McNulty. "We laud the expansion of Livestock Risk Protection insurance to include cattle producers, based on the success of the initial pilot program for hogs."
For fed cattle, the program will be available to producers in all counties in Illinois, Iowa and Nebraska, while the feeder cattle program is available in all counties in Colorado, Iowa, Kansas, Nebraska, Nevada, Oklahoma, South Dakota, Texas, Utah and Wyoming, according to the USDA.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® around-the-clock electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.5 billion per day in settlement payments in the first quarter of 2003 and managed $28.5 billion in collateral deposits at March 31, 2003. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME).
