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 MINUTES OF THE APRIL 22, 2020 

MEETING OF THE

U.S. COMMODITY FUTURES TRADING COMMISSION’S

AGRICULTURAL ADVISORY COMMITTEE 

The Agricultural Advisory Committee (AAC) convened for a public meeting on 

Wednesday, April 22, 2020, at 3:05 p.m. EDT via teleconference. At this meeting the AAC 

heard remarks from Sonny Perdue, the Secretary of the U.S. Department of Agriculture (USDA) 

regarding the USDA’s response on the COVID-19 (coronavirus) pandemic. In addition, the 

CME Group and ICE Futures US provided updates regarding the state of the market. 

AAC Members in attendance

Buddy Allen, President/Chief Executive Officer, American Cotton Shippers Association 

Joe Barker, Representative, National Council of Farmer Cooperatives 

Chris Betz, Representative, Michigan Agri-Business Association

Larry Birgen, Representative, National Farmers Union 

Darryl Blakely, Manager of Legislative Affairs & Market Regulatory Policy, National 

Cattleman’s Beef Association

Robbie Boone, Senior Vice President-Government Affairs, Farm Credit Council 

Amanda Breslin, Representative, Coalition for Derivatives End Users 

Patrick Coyle, Representative, National Grain and Feed Association 

Ed Elfmann, Vice President for Congressional Relations, American Bankers Association 

Edward Gallagher, President, DFA Risk Management, National Milk Producers Federation 

H. Thomas Hayden, Jr., Representative, Commodity Markets Council 

Matt Hines, Risk Management Consultant/Licensed Broker, Loewen and Associates, Inc., 

American Farm Bureau Federation

Thomas Hogan, Vice Chairman-Board of Directors, Cocoa Merchants Association of America

Thomas Kadlec, Representative, Futures Industry Association

Chris Klenklen, National Association of State Departments of Agriculture 

Ron Lee, Chairman, National Cotton Council of America 

Randy Melvin, Chairman-Risk Management Action Team, National Corn Growers Association 

John Owen, Chairman-Rice Futures Contract Working Group, USA Rice Federation

Monte Peterson, Director, American Soybean Association 

Mark Scanlan, Senior Vice President of Agriculture and Rural Affairs, Independent Community 

Bankers of America 

Stephen Strong, Vice Chair-Board of Directors, North American Export Grain Association 

Justin Tupper, Co-Chair-U.S. Cattlemen’s Association (USCA), Marketing & Competition 

Committee and Board of Directors Member, USCA

Hayden Wands, Chairman-Commodity and Agricultural Policy Committee, American Bankers 

Association 

Ryan Weston, Representative, American Sugar Alliance

Chris Young, Head of US Public Policy, International Swaps and Derivatives Association, Inc. 

Speakers and Panelists in Attendance 

Sonny Perdue, Secretary of Agriculture, USDA 

Rob Johansson, Chief Economist, USDA
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Dudley Hoskins, Senior Advisor to the Secretary of Agriculture, USDA 

Thomas LaSala, Chief Regulatory Office, CME

Derek Sammann, Global Head of Commodities and Options Products and Senior Managing 

 Director, CME Group 

David Farrell, Chief Operating Officer, ICE Futures US 

CFTC Commissioners and Staff in Attendance 

Heath P. Tarbert, Chairman and AAC Sponsor 

Rostin Behnam, Commissioner 

Dan Berkovitz, Commissioner 

Brian D. Quintenz, Commissioner 

Dawn D. Stump, Commissioner 

Summer K. Mersinger, AAC Acting Chair/Designated Federal Officer (DFO), Director, Office

of Legislative and Intergovernmental Affairs

Christa Lachenmayr, Economist, Division of Market Oversight 

David Amato, Supervisory Market Analyst, Market Intelligence Branch, Division of Market 

 Oversight 

I. Opening Remarks

Ms. Mersinger called the meeting to order. Chairman Tarbert then welcomed the 

meeting attendees. He remarked that many members of the agriculture community were 

struggling and he thanked them for the important work they were doing. He highlighted the 

critical role of the agricultural sector in the economy and noted that the sector has been the 

cornerstone of the Commodity Exchange Act. He then discussed the unprecedented uncertainty 

and price volatility the agricultural markets are facing due to COVID-19 and the need to discuss 

the issues members are facing and how they are dealing with these circumstances. He then noted 

two CFTC updates. First, he announced that in response to the public concern around the 

livestock market, he established a Livestock Markets Task Force that will monitor livestock 

contracts daily in real time. Second, he announced that the first CFTC liaison to the U.S. 

Department of Agriculture will soon be appointed. He concluded by thanking staff from the 

CME Group and ICE Futures, the other CFTC Commissioners, the Chief Economist for the 

USDA, and staff from the CFTC’s Division of Market Oversight for joining the call. He also 

introduced and welcomed the USDA Secretary, Sonny Perdue, to the meeting. 

Secretary Perdue thanked the Chairman, Commissioners, and all of the members of the 

AAC for the opportunity to join the meeting. He stated that he appreciated the Committee’s 

work and the importance of farming, food production, and the food supply chain, especially in 

the time of COVID-19. He emphasized his appreciation of the attention the AAC and the 

Commission give to the need for market transparency in the current environment. He stated the 

USDA was working as quickly as possible to bring help to those producers who have been 

devastated. He stated that the President, in the prior week, had announced a $19 billion support 

package for these producers and that the Department will use the funding to provide the support 

needed. He noted that the USDA was working quickly to implement these new programs and to 

write the necessary rules. He also noted that he had directed the USDA’s Agricultural Marketing 

Service to extend its investigation initiative after the Holcomb fire in Kansas to include the price 
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effects on live cattle and boxed beef during COVID-19, and that they were also working hard to 

help the agricultural community find customers overseas and to reduce the barriers to business 

during this time.

Following the Secretary’s remarks, Ms. Mersinger turned the floor over to the 

Commissioners for their opening remarks. Commissioner Quintenz thanked Chairman Tarbert 

for convening the meeting and for his leadership. He stated that it was timely that the AAC was 

meeting given the ongoing historic levels of prices and volatility in the agricultural cash and 

futures markets, and that he was interested in member insight on liquidity, market integrity, and 

the accessibility of futures markets in the current environment. He then discussed the 

Commission’s unique role in protecting America’s farmers and ranchers. He commended the 

Chairman for convening the Livestock Market Task Force to examine the conditions in the cattle 

markets and to ensure contracts are working as intended, and encouraged market participants to 

continue to voice concerns over the performance of any contracts. 

Then, Commissioner Behnam gave his opening remarks, thanking all including the 

Chairman for starting the Livestock Market Task Force, Secretary Perdue for his leadership and 

words, and the AAC for their continued hard work. He noted he had previously had the privilege 

of sponsoring the Committee and that crop insurance and farm credit continue to remain among 

the many issues growers and producers are facing today. The Commissioner commended the 

market participants for continuing to engage one another. He emphasized that communication 

was key and that it was important for all parties to continue to engage with one another to resolve 

issues. He further remarked that the CFTC will continue to be a partner through the current 

headwinds. 

Next, Commissioner Stump gave her opening remarks. She thanked Ms. Lachenmayr 

and the Chairman for organizing the meeting and all the panelists for their participation. She 

emphasized the CFTC’s role in preserving the integrity of the futures markets and its reliance on 

partners such as the Department of Agriculture to help maintain integrity. She stated the 

Commission takes very seriously its obligation to ensure that those who attempt to manipulate 

the markets are held accountable. 

Finally, Commissioner Berkovitz provided his opening remarks. He thanked the 

Chairman and Ms. Lachenmayr. He stated that it was important to engage with members of the 

affected markets so that they can hear what the Commission is doing to ensure market integrity. 

He thanked and welcomed Secretary Perdue. He then noted he had the privilege of traveling 

across the country last summer to meet with farmers, ranchers, and market participants 

throughout the U.S., which emphasized the importance of agriculture to both the U.S. economy 

and to national well-being. He also emphasize the importance of today’s meeting in light of the 

COVID-19 pandemic and stated that the discussions would help the CFTC ensure that the 

commodity markets continue to serve their intended function of risk management and price 

discovery. 

Following the opening remarks, Ms. Mersinger conducted a roll call of the AAC 

members present on the phone. 
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II. Market Statements by Exchanges

Ms. Mersinger introduced the next two speakers, Mr. Samman and Mr. Farrell. Mr. 

Samman began by thanking Chairman Tarbert and the Committee for the opportunity to provide 

an overview of the state of the agricultural markets. He stated that COVID-19 has caused 

unprecedented disruption to the global economy. He noted that these extraordinary 

circumstances have led to disruptions in the food supply chain, the results of which can be seen 

primarily in livestock and dairy markets, with the physical supply chain adapting to a shift in 

demand from food service to grocery channels and uncertainty around processing capacity. 

Mr. Samman remarked that cattle and hog futures at CME Group were particularly 

impacted by these shifts, and the CME has responded by taking proactive steps to widen the 

daily price limits to ensure that price convergence would not be impeded. He noted that liquidity 

in the live cattle contracts has improved significantly over the past few years as the CME has 

made contract enhancements that have boosted deliverable supply, and have addressed the 

potential for congestion during the delivery period. He noted the contract was able to withstand 

the current market uncertainty as a result. The dairy and grains markets have been similarly 

impacted and the CME has been equally vigilant in these markets. He further noted that the 

CME continues to work closely with the agriculture industry to maintain an open line of 

communication to build and improve the effectiveness of its futures and options contracts for 

robust risk management and efficient price discovery. 

Mr. Farrell spoke next, first thanking Chairman Tarbert, the Commissioners, and the 

Committee for the opportunity to provide an overview of the state of the agricultural markets. 

He stated that in such unprecedented times with disruptions on the supply and demand sides, the 

futures markets remain critical in providing their three primary functions to the agricultural 

supply chains: (1) risk management; (2) price discovery; and (3) allowing for convergence with 

the physical market. He noted the pattern of activity has been the same across all agricultural 

markets and that markets are starting to settle in and progress in a more normal fashion. He 

stated that while futures markets are electronic, there are aspects of the supply chain that could 

experience constraints as some activities require people to congregate to perform a function. 

Some examples include warehousing, sampling operations, transportation, and grading for 

commodities such as coffee and cocoa. In such cases, ICE Futures US is reviewing contingency 

plans and potential mitigations as precautionary measures.

III. Question and Answers

Ms. Mersinger then opened the floor for questions that were sent in ahead of time by 

AAC members. The first question was for Chairman Tarbert. The Chairman was asked how the 

CFTC plans on addressing the volatility dairy, cattle, and corn famers that are experiencing. He 

responded that the Commission has put together the Livestock Task Force to talk to all involved 

to better understand the issues, and is referring relevant cases to enforcement for further 

investigation.

AAC members asked about the activity in the crude oil markets and what the implications 

were for a negative price for the May contract and whether other products could go negative. 

Mr. Samman responded that the negative pricing was driven by three factors: (1) significant 
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oversupply of crude globally; (2) significant reduced demand for global oil due to the COVID-19 

pandemic; and (3) concerns about increasingly full U.S. storage capacity. He also stated that it is 

unlikely that other products, such as live cattle, lean hogs, and butter, would have negative 

pricing, as they are not as difficult to store as crude oil. Mr. Farrell added that negative pricing 

in other areas is possible, but unlikely. 

Committee members also asked if there were any rules or regulations that were 

particularly helpful during the pandemic or if there were ideas for new rules based on the 

pandemic. Mr. Farrell responded that the principles set out in the ICE rulebook have been very 

helpful. Mr. Samman remarked that the most important thing in the current environment is a 

continued dialogue with the CFTC and with customers. 

Ms. Mersinger then asked Mr. Amato whether the markets were reacting as he would 

expect given the current conditions. He responded that markets, with respect to price 

movements, were reacting the way he would expect, but remarked that these were historic times. 

He noted the hotspots regarding packing plants, and noted strange occurrences, including eight 

percent of milk being dumped and other effects on the poultry and hog industries. There has also 

been extreme volatility and gave as an example what is happening to cattle contracts. He also 

commented on some things he has noted in the Commitment of Traders Reports, including 

significant sell-offs by non-commercials. 

Dr. Johannson was then asked to discuss what the USDA was doing to keep the food 

chain supply operational and the USDA’s work with other government agencies. He explained 

that the food chain supply starts with farm operation and ends with the product in the grocery 

store. He also explained that transportation is a big part of that and USDA has been working 

with the U.S. Department of Transportation to ensure that goods can been timely transported. 

Additionally, the USDA has been working with the U.S. Department of Homeland Security

(DHS) and the Centers for Disease Control to ensure personal protective equipment is also 

considered in the supply chain. Further, the USDA has been working closely with companies 

and the various state governments, as well. Mr. Hoskins added further details regarding the 

USDA’s response. He stated that the USDA has looked to facilitating as much regulatory 

flexibility as possible to help redirect as much product as possible to the grocery stores. 

Ms. Mersinger also asked the USDA representatives how COVID-19 had impacted U.S. 

trade deals. Dr. Johansson responded that with respect to China and Japan, while there have 

been some delays, the U.S. is still moving forward with its trade deals. Mr. Hoskins commented 

on a tomato suspension agreement with Mexico. 

Next, Ms. Mersinger asked the USDA for an update on its work to improve rural 

broadband access. Both Dr. Johansson and Mr. Hoskins responded that this is a priority for the 

Secretary. Ms. Mersinger also asked the representatives to shed light on concerns regarding 

guest work visas. Dr. Johansson noted that the Department has been working hard with the U.S. 

Department of State, DHS, and the White House to limit disruptions. 

Ms. Mersinger then asked what the CME is doing to monitor the integrity of the index for 

the April contract given that some sale barns are reducing the amount of feeder cattle sales. Mr. 

LaSala responded that the CME is monitoring the contract and believed there would be adequate 
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volume for settlement in April. Ms. Mersinger also asked Mr. Amato what factors would cause 

swings in volatility in the cattle market. He responded that cash and futures are pricing different 

things, and there has been tremendous uncertainty, such as not knowing whether more packing 

plants will have to go offline. 

Next, Ms. Mersinger asked the status of the investigations following the Holcomb fires 

and how USDA has expanded its review to similar circumstances following the COVID-19 

outbreak. Further, she asked the status of requests the CFTC has received for investigations into 

the cattle market. Mr. Hoskins responded that investigations are ongoing and if there are 

violations they will be referred to the U.S. Department of Justice. However, beyond this, the 

Department was not prepared yet to comment publicly. Mr. Amato commented that the CFTC 

will continue to cooperate with USDA as in the past. 

In response to a request for an update on the CME’s messaging efficiency program in its 

pre-opening period, Mr. LaSala responded that the CME has a team devoted to monitoring this 

program and that when it sees problematic activity, it conducts a review or formal investigation. 

Ms. Mersinger then asked Chairman Tarbert which other entities the Commission was 

coordinating with and how the Commission will move forward with its rulemaking priorities 

during COVID-19. The Chairman responded that the Commission was working closely with a 

lot of other agencies in the U.S. government as well as with its counterparts overseas. He stated 

that while the CFTC has been focusing on its COVID-19 response and making the sure the 

nation’s markets remain orderly and liquid, it has also been moving forward on its current policy 

agenda. He stated the Commission is not starting anything new and big that is not essential so 

that it may focus its resources. 

Ms. Mersinger then thanked all the meeting participants and adjourned the meeting at 

4:55 pm.

IV. Adjournment

I hereby certify that the foregoing minutes are accurate.

_____________________________________ 

10/16/2020

Summer K. Mersinger 

AAC Acting Chair/Designated Federal Officer 

___10/16/2020_____

Date