1 

 MINUTES OF THE MEETING OF THE

U.S. COMMODITY FUTURES TRADING COMMISSION’S

AGRICULTURAL ADVISORY COMMITTEE (AAC)

June 9, 2021 

 

 The Agricultural Advisory Committee (“AAC”) of the U.S. Commodity Futures Trading 

Commission (“CFTC” or “Commission”) convened for a public meeting on Wednesday, June 9, 

2021, at 10:00 a.m., via teleconference. The meeting started with a review of, and vote on, the 

report of Agricultural Futures Contracts with Open Interest Subcommittee (“Ag-OI 

Subcommittee”). The meeting then proceeded with two panels. Panel I addressed international 

agricultural derivatives, including US-listed products, as well as overseas volume and open 

interest trends. Panel II discussed end-user perspectives on the pandemic and recovery, and 

highlighted the importance of agricultural risk management.

AAC Members in Attendance

Buddy Allen, American Cotton Shippers Association 

Joe Barker, National Council of Farmer Cooperatives 

Chris Betz, Michigan Agri-Businesses Association

Robbie Boone, Farm Credit Council 

Patrick Coyle, National Grain and Feed Association

Rob Creamer, Futures Industry Association/Principal Traders Group 

Robert Crosby, Managed Funds Association 

Ed Elfmann, American Bankers Association 

H. Thomas Hayden, Jr., Commodity Markets Council 

Matt Hines, American Farm Bureau Federation

Tom Kadlec, Futures Industry Association 

Chris Klenklen, National Association of State Departments of Agriculture

Erin Morris, US Department of Agriculture/Agricultural Marketing Service

Cynthia Nickerson, US Department of Agriculture/Office of the Chief Economist

John Owen, USARice Federation

Mark Scanlan, Independent Community Bankers of America 

Stephen Strong, North American Export Grain Association

Justin Tupper, US Cattlemen’s Association

Hayden Wands, American Bakers Association 

Ryan Weston, American Sugar Alliance

Brandon Wipf, American Soybean Association

Chris Young, International Swaps and Derivatives Association, Inc.

CFTC Commissioners and Staff in Attendance and Speakers

Dawn D. Stump, Commissioner and AAC Sponsor 

Rostin Behnam, CFTC Chairman (Acting)

Dan Berkovitz, Commissioner 

Brian D. Quintenz, Commissioner 

Summer Mersinger, Chief of Staff to Commissioner Stump/AAC Designated Federal Officer 

(“DFO”)
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Christa Lachenmayr, Senior Economist, Division of Market Oversight/AAC Alternate 

Designated Federal Officer

Invited Speakers in Attendance 

Will Acworth, Senior Vice President, Publications, Data, and Research, Futures Industry 

 Association

Christian Edmiston, Senior Director of Sourcing and Risk Management, Land O’Lakes 

Dr. Joe Janzen Assistant Professor, University of Illinois, Chair, AG-OI Subcommittee (Special 

 Government Employee) 

Owain Johnson, Global Head of Research and Product Development, CME Group 

David Rossen, Global Hedging Manager for Cotton, Louis Dreyfus Companies 

Fred Seamon, Executive Director of Agricultural Commodity Research and Product 

 Development, CME Group 

Dhamu Thamodaran, Former Executives Vice President and Chief Commodity Hedging Officer, 

 Smithfield Foods 

I. Opening Remarks

Ms. Mersinger called the meeting to order. 

 Commissioner Stump provided opening remarks. She expressed her commitment to the 

AAC, given that her roots were in agriculture. She also discussed her involvement in the Global 

Markets Advisory Committee (“GMAC”), the synergies within the two committees, and how she 

hoped that the presentations would explain how global markets are connected to the domestic 

markets the AAC focuses on. She stated that the panels would discuss the uncertainty and 

significant supply chain disruptions during the pandemic. Finally, she stated that she was 

looking forward to the discussion on the final recommendations offered by the Ag-OI 

Subcommittee (“Subcommittee”). She concluded by thanking Ms. Mersinger and Ms. 

Lachenmayr for organizing the meeting and all for attending and participating.

Next, Commissioner Quintenz gave his opening remarks, acknowledging Commissioner 

Stump for taking on the responsibility of serving as the AAC and GMAC sponsor, and thanking 

all who organized and are participating or attending. 

Finally, Commissioner Berkovitz gave his opening remarks. He thanked Commissioner 

Stump for her leadership of the AAC. He also emphasized the importance of the AAC’s work

and explained how it impacts every American in their daily lives when they go to supermarkets 

and restaurants. 

 

II. Final Report of Ag-OI Subcommittee

Ms. Mersinger turned to Ms. Lachenmayr, who introduced Dr. Janzen who presented a 

summary of the subcommittee’s work. He stated that the Subcommittee generally found that the 

current process for evaluating changes to agricultural futures contracts with open interest works 

well to support necessary changes that preserve the integrity of the markets. However, he 
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identified six recommendations grouped into two categories to improve or formalize current 

practices. 

The first set of recommendations addressed how the Commission interacts with 

exchanges and market participants public to identify necessary changes and bring those changes 

to fruition and fosters transparency and openness in evaluating those changes to futures 

contracts. First, the subcommittee recommended that, to the extent possible, the Commission 

provide information on which markets are subject to certain approval processes and how these 

approval processes are carried out. Second, the subcommittee proposed that there should be a 

more systemic process of engagement with market participants and suggested that the process of 

engagement should be formalized. Third, the Subcommittee recommended that the Commission 

should develop guidance and policy related to its dialogue with exchanges and market 

participants prior to and following formal submission. Finally, in order to better mitigate risks,

the Subcommittee recommended that risk disclosures to market participants should be updated to 

reflect changes to contracts that have open interest.

The second set of recommendations related to the Commission’s actual evaluation 

process. First, the subcommittee recommended maintaining a principles-based approach, 

concentrating on changes that are more likely to be material. Second, the Subcommittee 

recommended that the Commission should continually improve its guidance to reflect current 

market conditions and, in defined cases, should use self-adjusting contract specifications.

Ms. Lachenmayr then opened the floor to questions or comments from the AAC 

membership. There were no comments. Ms. Mersinger then took a vote on the motion that the 

AAC adopt the Subcommittee’s report and submit the report to the Commission for 

consideration. Ms. Lachenmayr took a roll call vote with nineteen votes in favor, zero votes 

against, and no abstentions.1

 The vote was unanimous and the motion was adopted. 

 

III. Panel I: International Agricultural Derivatives; US-Listed Products and Overseas 

Volume/Open Interest Trends

Ms. Mersinger introduced Mr. Johnson of CME Group as the first panelist. Mr. Johnson 

discussed agricultural pricing concepts, and then cash settlement. He stated that CME Group had 

been listing more cash-settled contracts rather than physically-settled contracts in recent years. 

They decide which settlement mechanism to adopt for a new contract based on what they think 

will work best given the circumstances. For physical delivery, CME Group examines the 

delivery infrastructure and whether they have confidence in the structure. For cash settlement, 

they look at whether they are confident in the price reporting agency (“PRA”), the cash index, 

and its methodology. Mr. Johnson observed that there shouldn’t be concern that the cash-settled 

contracts will replace major physical benchmarks. In fact, physical benchmarks enhance the 

liquidity of the underlying physical products because a lot of spreads trade, and when a lot of 

spreads trade there is increased liquidity on both sides. 

 

1 Written statements from Neil Dierks, Steve Strong and Hayden Wands indicated that they would have voted in 

support of the report and recommendations had they been present at the meeting.
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 Mr. Acworth introduced himself and stated that his presentation was organized into two 

parts. First, he discussed volume, open interest, and the number of contracts traded in edible oils 

and oil seeds, grains, and softs (sugar, coffee, cocoa futures). Second, he discussed these 

markets from a different perspective and measured the volume of interest by metric ton 

equivalents, which is closer to how end-users look at these markets. He noted that China has a 

very large agricultural futures market that covers a wide range of sectors. Moreover, the only 

market that comes close to the U.S. is China’s market. He noted that, in Chinese markets, the 

contracts tend to be small and that more trading comes from speculation rather than hedging. 

Finally, agricultural futures-trading in the rest of the world is highly fragmented by geography 

and highly concentrated in terms of liquidity. Mr. Acworth stressed that cross-border access is 

critically important for end-users who need these tools for risk management, and that it is 

positive for markets leading to increased liquidity and better price discovery. 

The panel then turned to a question and answer session. Generally, the concerns and 

questions raised included: a discussion regarding the size of the futures market for rice and 

cotton in China; the need for the CFTC to continue its cross-jurisdictional work; and the 

similarities and differences between the agricultural and energy markets.

IV. Panel II: End User Perspective on the Pandemic and Recovery-the Importance of 

Agricultural Risk Management

Ms. Lachenmayr began with a brief overview of the panel, stating that each panelist 

would introduce themselves and discuss the impact of the pandemic from their perspective. She 

would then discuss some of the key points raised by the panelists and open the floor for 

questions and comments. 

Mr. Edmiston stated that in his role at Land O’Lakes, he is responsible for procurement 

of all of their commodities and input for products across their dairy foods and feed businesses, as 

well as risk management for their core businesses. He highlighted three areas of impact from the 

pandemic. First, there was market volatility. For instance, blocks of cheese reached all-time 

lows and all-time highs within 60 days. A key component in this volatility was the government 

programs that created demand. Second, the volume volatility was a huge challenge as customers 

adjusted their ordering and reordering pattern. This caused Land O’Lakes to take a deep look at 

their risk management program and consider whether it was cross-functional. Third, keeping its 

product moving, especially when big segments of the economy shut down and demand fell, was 

another challenge for the company, as its products are perishable. 

Mr. Rossen, the Global Hedging manager for Cotton at Louis Dreyfus, discussed the 

impact of the pandemic. He noted the unprecedented change in demand and the wide range of 

fluctuations in demand for various commodities. With regards to cotton, the textile industry 

ground to an abrupt halt. Global futures and cash prices for cotton plummeted and the various 

participants in the value chain tried to get out of their obligations. He praised the Commission’s 

recent work on position limits and the flexibility in these rules as an important tool in risk 

management in the pandemic environment. He emphasized the need for robust risk management 

framework that is also flexible.
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Mr. Thamodaran discussed the impact of the pandemic as experienced by the largest pig 

and pork producer in the world. Mr. Thamodoran was retired from Smithfield at the time of this 

panel, but spoke about his experience while at the company. At Smithfield, he stated that their 

first goal was to keep their employees healthy. Their second goal was to keep their customers 

happy. Finally, they had to make arrangements with producers and restaurants that couldn’t take 

their product by deferring or extending their agreements. 

The panel then turned to a question and answer session. Generally, the concerns and 

discussions raised in this session included: the demand factor of the Phase 1 commitments, 

regulatory flexibility, and whether the government supports and roll outs were successful and 

coordinated well. 

V. Closing Remarks

In closing, Commissioner Stump, the AAC sponsor, emphasized the importance of

improving market access and how it is critical to those who have hedging needs. Additionally, 

the Chairman and Commissioners present all expressed enthusiasm for the excellent discussion 

and stated they were looking forward to future discussions. 

Ms. Mersinger adjourned the meeting at 12:25 p.m. 

___________________________________ ___________________ 

Summer Mersinger 

AAC Acting Chair/Designated Federal Officer

 Date 

08/30/2021