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Author: Brett30 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 113  
Subject: High grain prices to trigger high meat prices Date: 5/13/2008 6:11 PM
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Shameless point to an article I wrote for Seeking Alpha - but I have been doing research on the subject, and believe that meat prices will be the next to rise in this commodity bull market.
http://seekingalpha.com/article/76833-who-will-be-next-to-party-at-the-commodity-rager?source=feed

Looking forward to thoughts and feedback.

Thanks,
Brett
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Author: c0ffeen0te Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 96 of 113
Subject: Re: High grain prices to trigger high meat price Date: 7/17/2008 6:36 PM
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Brett
New to the board but I suspect your call was very prescient...haven't checked the markets precisely but guess here is that the various meat futures markets are nothing but up since you wrote it.

As far as feedback for the article itself other than the outcome, my view is that calling a market like commodities is sort of like calling the football games against the spread. We can list a half a dozen reasons why the Patriots will beat the Jets (better quarterback, better coaching...) but once the spread is set, and Pats are installed as a 7 point favorite, why do we think they will win by more than 7 points? Your article did a good job listing those factors that explained why meat prices are high, but the market tends to take that stuff into consideration and the guys that trade meat (or buy it for the food companies) spend all day long poring over meat economics. Of course you also have the technicians that don't give a whit about economics that trade on market movement (technicals).

No I don't believe in perfect market efficiency. The question is, what do I know that the "market" doesn't know. Where did the market get it wrong? Maybe stocks/use ratio is low and the price is not as high as it normally is when stocks/use are this low. Maybe there is a historical seasonal pattern that suggest prices are too low right now.

I think there is a danger that amateurs will pour into the long side of a market based upon some compelling reasons, not realizing that the smart money got in 50 cents ago and is looking for an exit.

But as an aide to understanding why we are paying so much for meat; as a way to participate in the discussion about the impact of ethanol subsidies on us, your article is useful and informative.

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Author: susan400 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100 of 113
Subject: Re: High grain prices to trigger high meat price Date: 9/28/2008 11:12 AM
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Brett, VERY INTERESTING topic.

I have not fully dug in but have the same thesis
in my head.

Caveats, 1) when? Some were sure skyhigh grains would have
put so mucn hog producers out of bis, we would have had a shortage this summer, but NONE.

H&P came out fri, all H&P at 102% ofa yr ago.

2) Apr LH are at 77, July LH 86 VS Dec 66$
is the shortfall alraedy discounted?

Short term I think FC V and X went to deep discounts to cash index, I think fearful of the economy meltdown risk.
Next I think corn is in a major bear even if it bounces and
FC being a input to LC with corn, could trun FC into a long term bull mkt.

Meats are not efficient and absurd fears create opportunity.

Lets keep this discussion going

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Author: Brett30 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 101 of 113
Subject: Re: High grain prices to trigger high meat price Date: 9/28/2008 12:57 PM
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Hi Susan,

Re: when - good question, I would have thought we'd see rising prices already.

About a year ago, I gave up trying to time these moves, and now wait, locked and loaded for a breakout. I use 20-day highs as my entry cues.

Re: discounts - it's possible, but I don't think so...I believe we'll see moves analogous to those we've seen in the grains (2X and up).

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Author: susan400 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 102 of 113
Subject: Re: High grain prices to trigger high meat price Date: 9/28/2008 2:20 PM
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some long term trend players use 20 D with success.

Yes teh questiuon is is the premium in out months underestimating
the move or over estimating.

One item I think meats are much more inelastic VS 20 yrs ago,
and a real move will be BIG

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Author: Brett30 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 103 of 113
Subject: Re: High grain prices to trigger high meat price Date: 9/30/2008 12:24 PM
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Great point on the inelasticity of these markets - agree completely, don't think we'll see China, India, etc stop eating meat even if we slip into global recession (are we there already?)

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