Tags: Ukraine | meat | prices | higher

Red Meat: Ukraine Crisis May Boost US Beef Prices

Thursday, 06 Mar 2014 10:51 AM

By Dan Weil

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The turmoil in Ukraine has helped push corn and wheat prices higher in recent days, and that could ultimately mean higher meat prices too.

May corn futures reached a six-month high Wednesday, and wheat futures stood near a three-month peak. Ukraine is the world's sixth largest exporter of wheat and the fourth-largest corn exporter, according to CNBC.

The lofty prices reflect "a combination of the Ukraine situation, which is worrisome, and the massive amounts of fund money looking for the home of highest net return," Jim Bower, president of commodity trading company Bower Trading, told CNBC.

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"Funds are making a big push into commodities here, especially wheat."

Ukraine's wheat and corn exports haven't been disrupted by the country's turmoil, but experts worry that they will be, according to CNBC.

And meat prices might ultimately feel the effect. "You should expect to see it in fresh items and meats," Jonathan Feeney, food and beverage analyst at Janney Montgomery Scott, told CNBC.

"But meat prices are relatively high already. So it will be up to the consumer and how they react. Food processors, or even retailers, could wind up absorbing the cost of this."

Meanwhile, experts say Ukraine's impact is dwindling on U.S. stocks.

"Markets globally are very resilient to these types of events,” Patrick Spencer, head of equity sales at Robert W. Baird, told Bloomberg, referring Ukraine's turmoil.

"The volatility certainly for this geopolitical situation is noisy but I don’t think it’s the key. Far more important is policy on interest rates. The macro direction and economic growth environment has been strong."

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