Price risk management
Price volatility is unavoidable in the Australian cattle market. Since the inception of the Eastern Young Cattle Indicator (EYCI) in 1997, there has been average difference between the yearly maximum and minimum price of 30-40%.
In response to the price volatility in the cattle market, MLA's risk management program seeks to raise awareness of the issues and provide tools to help combat the problem.
Australian Cattle Trade Rules & Cattle Contract pro forma
In 2008, the Australian Cattle Trade Rules (ACTR) & Cattle Contract pro forma were developed with assistance from MLA and published on the Grain Trade Australia (GTA) website. The ACTR provide industry standard terms and conditions to assist with the contracting of cattle by all Australian cattle market participants.
The ACTR underpins cattle contracts and forms the basis for trade by providing:
- Consistency in contract terms and conditions.
- Transparency in the contracting process.
- Clarity in business arrangements, thereby reducing risk of dispute.
- Robust dispute resolution in the event of default.
The ACTR can be used with existing contracts or in conjunction with the GTA Cattle Contract. The rules are underpinned by GTA's dispute resolution processes, which are well known and used within the grains industry. In addition, they are endorsed by the Cattle Council of Australia, the Australian Lot Feeders Association, the Australian Livestock and Property Agent's Association and MLA.
Access the ACTR and Cattle Contract pro forma
Cattle Contracts Guide
The Cattle Contracts Guide provides a checklist for the sale of cattle under contract, including an explanation of the standard terms and conditions included in the ACTR. The guide also spells out the GTA dispute resolution process and helps buyers and sellers understand how to use the ACTR to strengthen the cattle contracting process.
Get a copy of the Cattle Contracts Guide
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