Corn and agriculture ETFs aren’t the only sectors that could benefit from the worst U.S. drought in over five decades.
“U.S. hog farmers are slaughtering animals at the fastest pace since 2009 as a surge in feed costs spurs the biggest losses in 14 years, signaling smaller herds next year and a rebound in pork prices,” Bloomberg News reported Tuesday.
There are several exchange traded products that invest in livestock and have exposure to lean hogs.
The iPath Dow Jones-UBS Livestock Subindex Total Return (NYSEArca: COW) is the largest such product although the exchange traded note only has a market capitalization of $55.8 million.
The ETN had about 67% in live cattle futures and 33% in lean hogs at the end of August, according to issuer Barclays. ETNs are debt instruments that promise to pay the return of an index, minus fees and taxes.
Other options include E-TRACS CMCI Livestock Total Return (NYSEArca: UBC) and iPath Pure Beta Livestock ETN (NYSEArca: LSTK).
“Often when corn prices rise, livestock prices rise with them as farmers must pay more to feed their herds,”Alexander MacLennan writes for The Motley Fool.