Fallout From the Beef-and-Pork Surge

A few months ago I warned about the looming rise in beef and pork prices -- and, as I expected, we are now seeing this "news" make the rounds. Across newspapers and Internet sites, you can find stories about the new record in beef prices and rising prices in bacon and other pork products. It's simple supply and demand: As we all know, when supply gets low -- due in this case to a shrinking cattle herd -- prices are going to climb. Making matters worse, the rising disposable income in the emerging markets is putting upward pressure on demand for beef, pork and other protein as individuals migrate away from a rice-based diet. 

In that mid-January piece, I identified Pilgrim's Pride (PPC) and Sanderson Farms (SAFM) as potential beneficiaries. Those of you who took my advice on those two stocks are now sitting pretty: Each has easily outperformed the S&P 500, with Sanderson Farms stock up double-digits and Pilgrim's Pride having climbed more than 30%. Given those strong moves, particularly in Pilgrim's Pride, I'd recommend trimming the position back some to lock in some profits. But don't sell it all, because the beef-price pain will be with us for most if not all of 2014. ...264 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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