The US beef industry will gain a new financial tool for price risk management this month. CME Group has announced the launch of 90 CL and 50 CL Lean Beef Trim futures and options contracts, with trading scheduled to begin on July 20, pending regulatory approval.
The new products are designed to cover a key segment of the beef supply chain: the raw material used to manufacture ground beef and hamburgers. In the physical market, 90 CL and 50 CL beef trim refer to different lean-to-fat ratios, which are blended to produce the formulations sold through retail and foodservice channels.
According to John Ricci, Managing Director and Global Head of Agricultural Products at CME Group, the new contracts complete the industry's suite of risk management tools, enabling market participants to more accurately manage the price relationship between live cattle and the final beef products sold to consumers.
The contracts will be cash settled and based on the CME 90% Lean Beef Trim Index and CME 50% Lean Beef Trim Index, which reflect the weekly volume-weighted average prices of negotiated and formulated sales reported by the US Department of Agriculture (USDA). Each contract will represent 20,000 pounds of product and will be quoted in cents per pound.
The 90 CL contract is expected to be particularly useful not only for US processors but also for exporters supplying the US market, as 90 CL beef trim is the main product shipped to the United States from Oceania and South America.
According to Taylor Coughlin, Global Market Forecasting and Analytics Lead at FMG Global, the introduction of these futures marks a significant step forward in protein market risk management. He noted that beef trim prices have experienced substantial volatility in recent years, while packers, processors and end users have had very limited opportunities to hedge that exposure directly.
The launch of these contracts comes amid tightening US beef supplies. According to a recent analysis published by Beef Magazine, US beef production is expected to continue declining during the second half of 2026 and again in 2027 due to the reduced cattle herd and lower slaughter numbers. That environment has contributed to heightened price volatility across several segments of the beef market, particularly those linked to ground beef production.
Sources: Beef Magazine and CME Group.
