The CFTC has reportedly asked the Chicago Mercantile Exchange (CME) to hand over a raft of documentation concerning its trading practices, after a handful of smaller dairy farmers alleged that the cheddar cheese market is being manipulated by several multinational dairy companies.
David Gary, a spokesperson for the CFTC, said that requesting documentation was not an unusual practice, although officials at the CME refused to comment.
He added that the agency's enforcement division requests figures from the exchange from time to time, in order to establish which companies are influencing the market and also to determine the price of cheese for use on the futures market.
Despite the fact that the CME accounts for just 1 per cent of the US' annual sales of cheddar cheese, it is used to determine the amount farmers are paid for their raw milk - under a seventy-five year old agreement known as the Federal Milk Marketing Order.
This agreement is used as the basis on which all US dairy products are priced, from ice cream to yoghurts, fresh milk to cheese.
But critics have previously complained that the market is shrouded in secrecy and is prone to instability - two factors which have made it increasingly difficult for farmers to project how much money they will make for their milk.
The CME, however, issued a statement on Monday rebuffing claims that the market had been the subject of price rigging: "The exchange devotes significant resources, through our regulation department, to maintaining this integrity and closely monitors all our markets."
An investigation by US newspaper The Chicago Tribune in December 2004 discovered that Dairy Farmers of America, the US' largest dairy co-operative, strategically timed its purchases of cheddar cheese in order to secure higher raw milk prices for its members.
But while the DFA claims that its ability to shift prices has provided its 23,000 members with increased revenue, critics have protested that this has led to adverse effects on prices, left the market more volatile and subsequently forced priced many smaller, independent farmers out of the market.
Under current arrangements at the CME, traders are not required to disclose trading details to the public, something which has led dairy farmers, including the Ohio Farmers Union and the National Family Farm Commission (NFFC), to call for stricter enforcement of trading regulations and a greater degree of transparency.
Critics have also argued that the US government's relatively laissez faire attitude towards cash markets, as oppose to its strictly regulated futures markets, has also made it easier for larger dairy traders to bolster their influence.