Commodity Futures Trading Commission 

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Statement 

Opening Statement of CFTC Acting Chairman Walt Lukken 

Before the Agricultural Advisory Committee 

(As Prepared for Delivery) 

July 29, 2008 

I want to thank Commissioner Dunn for hosting this important meeting and thank you all 

for coming today. 

Since this Committee last met, we have witnessed unprecedented price increases 

across all agricultural commodities. These higher commodity and energy prices 

reflected in our markets are painfully felt by all Americans. Specifically, record prices 

have put considerable strain on agricultural producers and other commercial market 

participants due to higher and unexpected input and margining costs. 

Although recent prices have come off their highs, regulators cannot be complacent. 

Protecting the integrity of these markets, as well as the public that relies on the 

accuracy of their prices, lies at the heart of the CFTC’s core mission and today we look 

to you for your expertise and assistance. 

Most, if not all of you attended and participated in the Agricultural Forum on April 22 

when the CFTC brought together a broad cross-section of the agricultural markets in an 

effort to form a collective understanding of what was occurring in these markets. Our 

goal was, and continues to be, to work closely with the industry not only to help us 

identify problems in the markets, but also to partner with us in finding consensus 

solutions should it be determined the markets are not functioning properly. 

As you know, following the Agricultural Forum, the CFTC announced a number of 

initiatives for the agricultural markets. First, the Commission announced that it would 

use its special call authorities to collect additional information from swap dealers 

regarding the amount of off-exchange pension and index funds that are flowing through 

these institutions into our markets and provide a report by September 15th on whether 

these traders should be reclassified for regulatory and reporting purposes. Commission 

staff is making substantial progress on this unparalleled undertaking. In addition, the 

Commission announced it will examine greater risk management options for farmers 

and agri-business. The Commission also publicly unveiled the existence of its cotton 
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market investigation, which it continues to vigorously pursue. Also announced, the 

Commission continues to facilitate discussions with banking authorities to ensure that 

proper credit lines are available to agricultural entities during these times of higher 

prices and margins. 

A number of issues arising from the Agricultural Forum required greater market 

expertise and input and were referred to this Committee for discussion. One issue is 

the lack of convergence between the futures and cash prices of certain commodities. 

This matter is of great concern to me and the entire Commission. Some commercial 

participants have lost confidence in the ability to hedge in certain of these markets and it 

is critical that market participants work with the Commission to address this matter 

aggressively and head on. Moreover, we must continue to work together to ensure that 

producers and merchandisers have proper margin financing and alternative risk 

management options in order to promote proper hedging in our markets. These issues 

are on today’s agenda and I look forward to hearing from participants. 

Thank you again for your service to this Committee and for all of the assistance you 

have provided the CFTC as we tackle these challenges in the agricultural markets.