Agriculture Paves the Way

Volumes in grain trading continue to grow, elevating the role of the futures industry. However, when the U.S. Congress passes the Onion Futures Act in 1958, the exchanges are faced for the first time with a specific commodity being banned from trading. This moment of uncertainty spurs one of the earliest commodity innovations. In 1961, CME develops contracts on pork bellies (bacon), the first contracts based on frozen meat. The new contract gains momentum and, soon after, the exchange follows with live commodities — cattle and hogs. Diversification into live commodities opens the door to revolutionary new risk management vehicles for the nation’s meat industry.

Live cattle contracts introduced, 1964