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iPath Bloomberg Livestock SubTR ETN Message Board

  • luktrot luktrot May 21, 2008 1:20 PM Flag

    COW and McDonald's

    I was wondering if McDonald's or any of the other major meat buyers don't have some control over prices and keep prices depressed by putting pressure on cattle and pig farmers. Also, how do government subsidies come into play? It doesn't make sense that higher corn prices don't translate into higher meat prices, but then how does McDonald's manage to keep those $1 items on its menu? One final question I have is with regard to futures dating and contango. How is it currently influencing COW? Does anyone have any thoughts on these subjects?

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    • Several recent reports have indicated that beef prices have been kept low as farmers reduce the size of their herds due to rising feed costs. Herd sizes are low enough now that beef shortages are a possibility, which should increase prices. McDonalds will shrink patty sizes or add filler material to keep costs down so they can still have $1 menu items...

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