ForwardTrade recently launched an electronic trading platform aimed at reducing forward risk in the boxed beef market. The online marketplace is designed to provide an efficient and transparent trading system for beef processors and buyers to build objectively priced out-front positions, creating a more stable and competitive marketplace.
Buyers and sellers in the beef industry have long relied on out-front sales for risk management and planning. Yet, with USD A estimating beef supplies shrinking to levels not seen in sixty years and price volatility at an all-time high, forward sales have fallen to new lows, leaving buyers and sellers exposed to unpredictable spot market prices, say company officials.
“Never before has the technology existed to deliver dynamically generated, objective prices on physical offers of beef out-front,” says Mike Neal, CEO. “The ForwardTrade platform finally gives buyers and sellers a more accurate, responsive price to reduce risk on forward transactions. ForwardTrade gives buyers and sellers the confidence to trade out-front again. It eliminates the guesswork in out-front pricing, reducing risk through a simple, fast and efficient trading platform.”
Processors and buyers interact through the FowardTrade platform’s Dynamic Price Horizon interface that provides used with a 52-week view of the direction and depth of the market. The dynamic prices, generated with industry-leading ratio forecasts and live cattle prices, provide an online pivot point where either the buyer or the seller can initiate a trade. Boxed beef products for specific shipment dates by processors are available for immediate purchase at the dynamic price. Similarly, buyers can create custom bids for immediate consideration by processors to lock in their forward volume.
Companies such as JBS-USA and Cargill Meat Solutions have committed to using the marketplace. “Understanding the need for more trading predictability, ForwardTrade provides a strong economic incentive for the industry’s leading beef processors and retailers,” says Neal. “Considering today’s market volatility, ForwardTrade provides a safer way to manage risk and improve the bottom line.”
ForwardTrade was launched by experts in predictive analytics and online commodity marketplaces, including Neal, founder of DemandTec and SignalDemand, and The Seam.