Kooyoong I think the bull market for meats will be much like the grains - all move significantly higher in time but obviously not all at once. Without trying to nail down 'which one goes first' and with the knowledge they'll all go in fairly close timeframes I don't really think it matters.
I am a grain farmer and not really interested in going back down the livestock path.
I own AAC shares and am considering topping up at current levels. I am really quite surprised they have tumbled as they have.
I also own feeder cattle and live cattle futures but only the most deferred contracts on the CME (Chicago Merc Exch). The reason I chose cattle over the pork contracts is that the deferred contracts were actually trading in backwardation there for a while. This was not the case with pork and a large difference in the front month pricing versus back months existed. So for the market to try and tell me beef will be cheaper in a years time than it is today is simply madness and more importantly signals there is not a lot of speculative money on the long side of the beef futures at present.
So for me it was between beef and pork because I do not know of any sheep or chicken futures contracts with the same volumes traded as the CME.
Interestingly one of my neighbours rang me the other day and said he had done the figures on setting up a feedlot for cattle and came to the conclusion he would be better to simply buy cattle futures ...
That Don Coxe and Ned Schmidt are highlighting the likely inflationary moves of meat merely gives me confidence there are money flows headed this way soon. Good luck!
