CME Group is planning on launching two types of beef trim contracts.
The move is intended to help the industry manage risk associated with producing hamburgers, the group said.
Trading is expected to begin July 20, pending regulatory approval.
The 90% and 50% lean beef trim futures and options contracts will track products used to produce high-volume ground beef. Units will be traded at 20,000 pounds per unit.
“These new contracts are designed for the last stage of bringing cattle to market, giving producers a complete set of risk management tools,” said John Ricci, managing director and global head of agricultural products. “By offering both 90% and 50% lean beef trim specifications, market participants can now precisely manage the input costs tied to popular retail blend ratios, bridging the gap between live cattle prices and the ground beef they ultimately sell.”
