Prices for live cattle have risen this year. Melina Mara / Washington Post
Prices for live cattle have risen this year. Melina Mara / Washington Post

Steer for investors -look to the fatted calf

Bearish investors looking to rustle up a profit are finding the path to juicy returns is not found on bull markets but cattle exchanges.

Prices for live cattle - and feeder cattle, their older, fatter counterparts - have risen this year. Futures contracts for live cattle - young steers and heifers - have risen 5.3 per cent since the start of the year to US$1.42 per pound of beef, while feeder cattle have increased 11.8 per cent.

The MSCI World Index of global equities, by comparison, has sunk 7.3 per cent during the same period. Prices for feeder cattle and live cattle have been resilient in the face of the euro zone's worries, said Ole Hansen, the vice president of trading advisory at Saxo Bank. "It's one of these recessionary-type diversification trades because you'll have the demand no matter what," he said. American demand for beef was as strong as ever, while Chinese consumers were starting to change their dietary habits from chicken to beef, Mr Hansen added.

"With a growing middle class, there's a slow change in dietary habits, and this is one of the things raising demand," he said, adding that it would take a lengthy bout of recession for that effect to go into reverse. Drought in the southern US was also having an impact on grazing herds, Mr Hansen said. "That's reduced herds quite dramatically, and that's what's spurring this on."

The result is cattle herds that are slimmer than last year, meaning less beef for the markets.

Prospects are looking good for cattle ranchers, analysts from Rabobank wrote in a report.

"With the anticipated relaxation of import restrictions by Japan and the recent ratification of the US-Korea Free Trade Agreement, we see both improved market access and export demand providing strong support for US beef prices in 2012," the report said.

A weakening US dollar against the Australian dollar and the Brazilian real should also make American beef a mouth-watering prospect for investors.


Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

UAE currency: the story behind the money in your pockets
Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Tour de France Stage 16:

165km run from Le Puy-en-Velay to Romans-sur-Isère

UAE currency: the story behind the money in your pockets
Company profile

Date started: January, 2014

Founders: Mike Dawson, Varuna Singh, and Benita Rowe

Based: Dubai

Sector: Education technology

Size: Five employees

Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.

Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)


Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Herc's Adventures

Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5

Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week