Amid Global Price Spike, Not All Beef ETPs Are Equal

Includes: COW, UBC
by: Camari Ellis

This year food prices have experienced drastic increases. It is reminiscent of the Book of Revelations in the Bible! Corn is up 20%, wheat is up 7.53%, soybeans are up +17.93, pork is up 7.45%, sugar is up 25.75% and beef is up 16.43%. There could truly be a famine in the land if prices continue in this fashion. This is a global phenomenon.

From the demand side, many emerging market countries such as China and India have middle class populations that are developing expensive taste and want to expand their dietary base by demanding meats as their wallet size increases.

From the supply side, crop yields have become more of an issue. This summer Russia, which is the third largest wheat exporter globally, banned wheat exporting, causing wheat prices to spike worldwide due to extreme heat conditions causing a lose of approximately 20% of their winter crop.

According to an article on Bloomberg by Elizabeth Campbell, hog and beef prices are rising due to higher demand. Ironically, wheat and corn make up feed for cattle, so if these price spikes continue to move higher, cattle herders will be forced to pass these costs along to consumers, thus seeing a possible increase in beef prices.

Sadly, there is not much a person can do to control this, outside of becoming a vegetarian. However you can invest in futures contracts or the more popular option of using exchange traded products ((ETPs)) to invest in commodities, such as beef and hogs.

Here are two ETPs that invest in livestock, COW and UBC]. Below we will examine both funds side by side.







Inception Date









Asset Under Management



30 day Avg Daily Volume



YTD Return



From looking at the table, an investor sees that UBC has a lower fee and has experienced a higher rate of return for the year. Unfortunately, all ETPs are not made equally. UBC's YTD return is much higher then COW's, which is mainly due to their index weights of hogs and cattle. UBC has a higher allocation to Hogs then COW and hogs have experienced greater price appreciation YTD. However, COW has higher assets under management and has a higher 30 day average daily volume, which would allow the average investor to enter and exit positions in COW much easier then UBC. So when evaluating ETPs you must consider all factors and not just returns.

Disclosure: No positions

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