Remarks at Agricultural Commodity Futures Conference

Good afternoon, everyone. It's great to be here in Kansas for AgCon. I want to thank Kansas State University President Richard Linton, Director of the K-State Risk Management Center Joe Parcell, and everyone who helped make the return of this great conference a reality. Before I provide my opening remarks, I must note that the views I share today are my own as Chairman and don't necessarily reflect those of the Commission,

When we announced that we were bringing AgCon back, we said we wanted this to be a gathering where the CFTC staff could listen and learn about issues facing producers and agribusinesses, activity in the markets, and how to better ensure that end users have the risk management tools they need to hedge their risks. We want this to be a conference that addresses the topics that our agricultural stakeholders actually face - and that's exactly what we intend to do throughout the course of this conference.

Some of my predecessors would count a tour of an Impossible Meat processing facility an "ag visit." My definition's a bit different: I have instead spent a lot of time this year traveling around the country and talking to farmers and ranchers working hard each day to provide the food, feed, and fiber we depend on throughout our country and the world. I've met with farmers, ranchers, agribusinesses, and energy producers in Iowa, Texas, Nebraska, South Carolina, and Florida, and now, I'm with all of you here in Kansas.

All these meetings have reminded me of one thing: Agriculture is not just another market the CFTC happens to regulate. Agriculture is part of the foundation of why this agency exists in the first place.

We don't take the same approach to regulation in agriculture as we do in say crypto or precious metals. The agency understands that livestock production and marketing is different than row crops and specialty crops. Agriculture is regional and affects the Midwest differently than the South or Northeast. We're working to tailor our regulations to make sure our markets work for everyone.

To ensure we hear from producers and agribusinesses directly to guide our approach, I reconstituted the CFTC's Agricultural Advisory Committee, which had been dormant for years. We had our first meeting in July, and it was a big success.

We discussed numerous topics including Basel III, access to clearing, potential risk management gaps between CFTC and U.S. Department of Agriculture (USDA) product offerings, 24/7 trading, and perpetual futures. I look forward to diving deeper into all these topics throughout AgCon.

Additionally, I hired the CFTC's first ever Senior Agriculture Advisor, Emma Johnston. Emma is the fantastic lead staffer on the Ag Advisory Committee and helped plan AgCon. She regularly meets directly with producers and agribusinesses and advises our team and me on developments in the agricultural markets.

For generations, futures were primarily used in the agricultural industry and traded via the Chicago Board of Trade. But by the early 1920s, concerns over speculative prices, price manipulation, and a postwar collapse in grain prices intensified calls for federal oversight. In 1922, Congress enacted the Grain Futures Act, recognizing that grain futures prices helped determine what farmers received for their crops and what consumers paid for food nationwide. The law established federal oversight of grain futures exchanges within the USDA, laying the foundation for modern commodity regulation. In 1936, Congress expanded the framework through the Commodity Exchange Act, extending federal oversight beyond grain to other agricultural commodities. Then, in 1974, Congress created the Commodity Futures Trading Commission as an independent agency, extending its jurisdiction to a broader universe of statutory commodities - including virtually everything except onions and motion picture box office receipts.

Fast forward to today: we now oversee a wide range of markets in agricultural, energy, metals, interest rates, and an increasingly innovative range of financial products. But expanding our jurisdiction did not mean abandoning our roots. I believe that if our markets aren't working for farmers, ranchers, and producers, then they aren't working at all.

In fact, Congress created a special category of "agricultural commodities[1]" within our statute for good reason. Because agricultural commodities are different from other types of products and oftentimes demand disparate regulatory treatment.[2]

Under my leadership, the CFTC has spent a lot of time getting back to its roots and focusing on this important class of agricultural commodities that the Commodity Exchange Act's framers cared so much about. We want innovation, competition, and new ideas. But innovation should expand the risk management toolbox available to producers, not force them to throw away the tools that already work.

One of the main topics in agriculture we've heard throughout this year, whether in D.C. or while traveling across the country, is 24/7 trading. I've been very clear about our approach: just because something works in one market does not mean it automatically works in every market. When exchanges sought to introduce 24/7 contracts, we listened to the people who would have actually used those markets, and we stood up for them. We have made clear that markets in agricultural commodities should not be dragged into a 24/7 model simply because the technology exists to make it possible. The Commission will not take a one-size-fits-all approach to 24/7 trading, and I've said repeatedly that agricultural commodities may not be appropriate for continuous trading as seen in perpetual contracts.

We can modernize markets without losing sight of the people those markets were built to serve. That same philosophy extends to data. The Commitment of Traders (COT) report has been an important source of transparency for decades. We heard from the ag community that it can be more useful, so we listened. That's why we are working internally to publish the COT report twice a week by the end of the year, giving market participants access to more timely information about trading positions and activity in these markets.

While we take steps to modernize and automate our data for public consumption, we are still abiding by our statutory remit to monitor and surveil the markets for potential manipulation to facilitate sound and efficient markets with fair competition. To ensure we have sufficient access to data, we are working closely with the USDA to share information where appropriate, promote transparent markets that enable price discovery, and work with the prudential regulators to streamline capital requirements and foster access to clearing to better serve customers. USDA Secretary Brooke Rollins and her team understand how important well-functioning risk-management markets are to American agriculture. The CFTC and USDA are working toward an updated memorandum of understanding that will strengthen coordination and information sharing between the two agencies and help us better serve farmers, ranchers, and agribusinesses.

The CFTC is also working with the Environmental Protection Agency (EPA) on issues involving Renewable Identification Numbers, or RINs, carbon credits, and derivatives referencing or economically tied to these products. We are increasing our collaboration with EPA Administrator Lee Zeldin to ensure we are conducting appropriate oversight of RINs and renewable fuels markets to deter fraud and manipulation, and ensure our markets are safe and competitive for all market participants. The CFTC remains the cop on the beat and seeks to best support our EPA colleagues and the core constituencies of both agencies, the farmer and producer, through fair markets for all market participants. These are exactly the kind of issues that agencies should be talking to one another about rather than operating in silos.

The same goes for Congress. We have worked with members of both the House and Senate, the White House, and Secretary Rollins to advance policies that address the needs of American farmers, ranchers, and producers. That cooperation is especially important, because the CFTC cannot solve every problem through regulation.

Under my chairmanship, I've made it a priority to refocus the agency on its statutory mission. Gone are the days of using our resources to pursue ESG objectives or climate-policy initiatives that are outside our core responsibilities. Instead, we are focused on market integrity, competition, innovation, and regulating the markets Congress gave us the responsibility to regulate.

One of those markets is the agricultural commodity futures market. This market is so important that we didn't just bring CFTC officials here. We brought senior officials from the White House and USDA so they can hear directly from you.

I look forward to the conversation we will have over the next few days and thank you all for being here today and giving us the opportunity to listen.

Now, I would like to introduce Dr. Tim Steffensmeier, Assistant Vice President and Director for Engagement and Outreach for Kansas State, to help me open up this conference.