Remember that old saying? The one about if you love something, let it go? Maybe it’s time for the cattle business to do a gut check and find out just how much we love the futures market.

That seems to be a growing sentiment in cattle country. Live Cattle futures have become so disconnected from any semblance of reality that their usefulness to cattle producers is suspect at best and damaging at worst. And Derrell Peel, Extension livestock marketing economist at Oklahoma State University, recently wrote about frustrations with Feeder Cattle futures.

“Feeder futures have become increasingly volatile in ways that often appear unrelated to market fundamentals. Erratic futures price movements and increased basis volatility makes it difficult or impossible for the industry to use feeder futures for its two primary roles of risk management and price discovery,” Peel says.

I have, for all of my nearly 40 yards as a very interested observer of this business, defended cattle futures as a necessary part of the overall dynamics of our market. And I have, over those many years, lost a few readers because of it. So be it.

However, the seemingly irrational actions of the futures market gives cause for pause in that thinking. I fully admit that I am not a student of the futures market. I don’t follow it closely, don’t understand it well and have traded cattle and grain futures only sparingly, and that was many years ago.

But a recent Economic Letter from the Dallas Federal Reserve caught my eye. Its title is “Stock Market Provides Imperfect View of Real U.S. Economy” and it says that the stock market, through measures such as the Standard and Poor’s 500, is often thought to be an economic bellwether. However, market volatility compromises the reliability of such indexes.

I don’t know if we can draw parallels between the stock market and the futures market. I’m not an economist. But it’s clear that volatility in cattle futures has compromised that market’s ability to be an economic bellwether for beef producers and the beef business.

Is it time to seriously discuss whether or not cattle futures have a place in the beef business? I think it is.

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