Effectively, import permits are issued per-country, and can be withdrawn on a whim to keep agrarian lobbies on their toes in exporter countries. That is done through sanitary and food safety permits.
Current sky high prices may well be because you got a counterintuitive reaction from permitting officials, and they will fall again once they will ease on imports.
China been historically edgy on imports of pork, and most private importers specialise on beef and chicken instead.
It is even worst than that, it is not even issued per country or per company, it is per Plant basis. Along with other regulation hurdles. So you end up with news about China opening up to certain countries for import but then not issued a single license permit of any plant for years.
But despite all of these, the still allow proteins via unofficial channels. The word "Allow" here means they knew about it, but they turn a blind eye to it.
and this is how those connected people make money.
A recent one that comes to mind is a thread that was talking about nuclear reactors, within a few hours (I think within the first hour) someone that actually designs nuclear reactors for a living was in the thread clearing up misconceptions and answering questions.
I appreciate the insight.
Even when you think all signs point to a conclusion - think “peak oil hypothesis” something can come out of the moon that changes all your hypothesis, ruining your funds return easily.
One sterling example of what makes a great trader came when he was woken up to news of Chernobyl. Like most people aware of the disaster, he was thinking in terms of fear, long term effects of radiation and nuclear anxiety. His trader friend called him with a tip to buy potatoes. He called back to say also diapers.
The trader correctly identified market trends in reaction to both nuclear radiation on global food stocks, and human behavior aggregates to nuclear anxiety (which in 9 months leads to higher demand for diapers).
It's a state of mind not entirely human, but understanding human behavior.
Is this real? Similar claims were made about a baby bump around June 2002 (9 months after 9/11), but nothing happened [1].
The host has a libertarian bias but is pretty upfront about it so you know where he's coming from. I don't agree with him on everything but his podcast is almost always interesting.
So disappointing to see the top comment is an outright lie. This story has been covered by the mainstream media since 2018. What's even more worrying is this guy is giving investment advice to naive commenters who know no better.
https://www.economist.com/china/2018/09/06/african-swine-flu...
https://www.bloomberg.com/graphics/2019-eliminating-african-...
https://www.washingtonpost.com/world/china-races-to-corral-a...
dman 1 day ago [-]
Any examples of how a retail investor would play this?
reply
xwowsersx 1 day ago [-]
Buy TSN, SAFM, HRL...but it's probably too late at this point. We were placing bets on this 18 months ago.
"Buy TSN, SAFM, HRL" sounds like an investment advice. Not only that your top level comment is investment advice as well, even if it doesn't directly mention an instrument or stock to invest in.
Is what the first mover brands are doing that unreproducible?
And TBH I think the obsession with a burger replacement is some American thing, here they are used for replacing meat (mostly minced meat) in all kinds of foods. I'm not sure I've even tried a fake-meat burger yet.
As near as I can tell (not chemist), they're focusing their patents on (a) extractive methods (e.g. how to produce raw starting blocks from actual, grown plants) & (b) specific mixes or treatments that target the meat-analog market.
For example, a lot of their parents are of the form of "a food product with X% this, Y% that, Z% the other. Where X had a molecular weight of A and a gel point of B degrees. Where Y has..."
All anecdotal, though.
Historically, veggie burgers were terrible. Most meat eaters still love their beef, but most of my friends actually like Beyond Burgers and get them not because they care about the environment or animal rights, but simply because they like the taste and want something beside a beef burger for a change.
I'm not saying it can't be replicated. I have no idea how well these companies will hold their share in the future. If I had to bet, I'd bet that McDonald's and Burger King and Wendy's will all make their own version, and Kraft or Frito Lay will make one for supermarkets, too.
But the market has definitely changed with the newer burgers. They're actually good now!
While they don't begin to approximate beef, I've tried these two recipies and like them
https://www.forksoverknives.com/recipes/five-ingredient-vegg...
https://www.forksoverknives.com/recipes/basic-veggie-burger-...
For health reasons I've spent the past year trying to give up meat and other animal products, to eat whole food plant based, and I've found every approximation of meat to just be blah and have just given up trying to recreate meat and instead have just found other things to make, but you can make a pretty good sandwich out of a bean-based pattie.
These franken-creations like the impossible buger just seem like a bad idea. They use a lot of extracts/refined stuff, which means you've got some amount of waste, and all the added cost of refining the ingredients and processing the patties and you still don't come close to re-creating a good seasoned beef patty.
A lot of people simply want to switch due to the environmental impact but take the first four impossible burger ingredients list :
- Water
- Textured Wheat Protein -
- Coconut Oil
- Potato Protein
3 of the 4 ingredients require a lot of processing, two of those are made from crops that are able to be farmed in a fairly sustainable fashion. The coconut oil however, at a scale required to replace beef, would likely quickly become unsustainable like palm oil is.
A single coconut only provides about 2 ounces of oil... it might be better than raising cattle but just eating beans, or whole wheat, would probably be orders of magnitude better.
Coconuts would be literally 100 times better than beef. Not to mention, coconut oil makes up less than 8% of the total burger. So, even if it was hypothetically worse (which it's not even close) the other 92% being exponentially better would far outweigh it.
And having something other than beef or fake-beef is better yet... which is what my comment is... finding alternatives to hamburgers instead of trying to recreate a hamburger by playing Doctor Frankenstein.
Seconded. They're the same price in Canada and the taste of the Beyond patties is often better than the meat ones. It's a good change of pace if I'm not seeing pure protein (in which case whey powder is probably better anyway).
From what they are saying internally this is/will continue to be a huge shift in the market, the Chinese importers are paying way more generally and even for the parts that the European market doesn't use directly for human consumption.
I am going to guess Danish Crown?
Chinese has always been buying in qualities that exceeds any supply capacity. And that was before ASF, after that they try to contain it, as well as opening up more Brazilian Pork Import. While xwowsersx was genius in placing the bet 18 months ago, the price / tonne wasn't so clear* until close to mid 2019 when everything went out of hand.
* It wasn't clear because despite raising prices, pork prices ( Brazilian ) has been trading at a ridiculously low level since ~2015.
https://www.danishcrown.com/en/contact/our-locations/danish-...
Danish Crown UK Ltd
Activities:
Sales to retailers, meat processors, wholesalers, foodservice, independent retailers and butcher shops.
Production of premium hand salted Danish bacon and bespoke foodservice pork and beef.
Nationwide distribution.
Products:
Cured pork (gammon and bacon), pork, beef, chicken, lamb, burgers and sausages.
Edit: > Insulin can be made from the pancreas of pigs or cows. Human versions can be made either by modifying pig versions or recombinant technology.
Is this an issue with everyone? Or China in particular due to incompetence?
Once again another example of how Freedom of Speech is a foundational value of immense importance and should only be violated if there are extremely good reasons for doing so (and the vast majority of the time there are not).
I'm sure the Party thought they had a good reason.
In fact, I'd think everyone who ever suppresses speech thinks their reason for doing it is a good one.
They did, and it’s one of the key reasons centrally planned economies always fail (really their resistance to failure is only determined by their people’s endurance for suffering). In a free market, value is set by supply and demand, bad decisions and bad ideas don’t survive, and you have some reasonably decent metrics to measure success. In a planned economy, value is set by the planning committee. As a decision maker in such a system, your value is determined by how successful you are at convincing those higher up the chain that you have good ideas and make good decisions. Every decision maker in the chain of command is incentivized to lie to their superiors, and the ultimate authority is incentivized to lie to the public. Small failures and course corrections are not possible under such a system, so for a failure to be acknowledged, it has to overcome the ability of the person who’s responsible for it to conceal it. It becomes essential for anybody with any power to control the “truth”.
You can see the same dynamics at play in any sufficiently large organisation (generally scaling proportional to the slowing feedback loop between decision and outcome, and with any form of complexity that would obscure the direct relationship between decision and outcome), though usually on a much smaller scale. China allows enough free market activity to take place to allow it to survive, but you can see the failures of its planning committees everywhere.
Indeed. For reference, pork in China is usually just referred to as "meat".
The Chinese government maybe evil, but it's NOT stupid and they do not hate piggies. Besides, you can say that pork is the most popular meat supply in China, but it's not like that the Chinese would die without pork, chickens and beef are both fine protein supplies. Please don't attach everything that happened in China to politics.
The article explained why the crisis is much worse than it would have been if the government had acted wisely. If you disagree, then present some specific arguments, not just the vague, general one that the Chinese government is not stupid and so therefore it must have acted wisely.
"Please don't attach everything that happened in China to politics" But the article was about governmental action.
But I am going to assume you know all that and you have avoided a discussion of specifics because you know that it indeed did screw up.
"Please don't attach everything that happened in China to politics" But the article was about governmental action. So what you are trying to do is divert attention away from the government's action. My observation is in the last year or so at HN, that has become the standard tactic for China government defenders.
implying the usual Chinese Government stupidity isn't happening.
https://www.zhihu.com/search?type=content&q=%E9%9D%9E%E6%B4%...
I wonder if it was affected farmers keeping their competitors from getting a leg up, or some flavor of domestic terrorism.
https://www.scmp.com/news/china/politics/article/3042122/chi...
These should cover it. Most dystopian story I've read in years!
While we're here, did you leave tofu off of your proteins list? China is already one of the the fastest growing markets for it.
I don't have a prediction if that will make total soybean consumption go up or down in this scenario. Substitution effects can be extremely difficult to predict.
Thanks for sharing though, it's quite interesting.
1. Have to look at how much feed those require vs pigs (clearly chickens require way less) and
2. Pork is a cultural thing in China. There's some substitution, but to an extent they will simply eat less protein in absolute terms.
These were the kinds of things we thought a lot about. Had to think through this very carefully.
What I find most interesting about this is that by importing pork, hypothetical China effectively imports the same quantity of American soybeans, but without paying the soybean tariff.
They'd much rather be importing cobalt (soybeans) and exporting iPhones (pork).
I see this all the time. Is there any data to suggest a political crisis is possible? China is a well controlled authoritarian country.
Combine this with food riots being the fastest and oldest way to lose control, and it's remarkable you're even asking the question. It's like someone asking if the air can even be polluted, after decades of regulation have been implemented to control it. Well, yeah... just remove the regulations and see what happens.
In fact, from what I have read there is even a principle in Confucianism that if the people are starving and are in revolt, it means the government has mismanaged the country and has "lost the mantle of heaven" and should be replaced.
Nobody has talked about the mandate of heaven for at least a hundred years, orientalist historiography notwithstanding. Historically, compared to other peer societies over the same periods, China has been very stable for long periods of time. It is only in the extremely myopic recent that the so-called "developed world" has seemed more stable and prosperous, and even that's highly debatable in aspects. On the other hand, when it does happen, rebellion or discontent for basic food safety reasons has no unique Chinese angle to it because it happens all the time all over the world, so I'm not sure what there is to gain by injecting something Chinese into it, except knee-jerk ideology.
Your comment diverts the discussion away from this very important issue, which I assume was your intention.
Is this true? Prompted by your phrase "any revolutionary government", I thought of three ways for a government system to gain control:
1. Winning a civil war (aka revolution).
2. Winning a war of conquest.
3. Organic development from a previous system.
Stipulating that option #3 isn't really a way to lose control, it still seems to me that #2 is probably older than #1.
https://www.nytimes.com/2019/06/04/business/china-food-price...
McRib is how McDonald's plays the pork futures market.
Wisdomtree ETF which tries to track US hog futures prices (with some drag)
The trend toward plant based food also helps.
Not sure about CVGW. Might be too small a market.
In this case, the 72% does not accurately reflect the increase in value, unless they almost double their dividend for quite a few years after the whole Chinese pork fiasco.
Market effect are exaggerated by investors and speculators. (Read: amplified, not fabricated [usually].)
I am not sure what you mean in terms of someone being right and someone being wrong.
Edit: The point about future value of dividends is a common approach. My personal addition was that 72% is probably an exaggerated effect, but these kind of swings are to be expected, with later corrections. The point about irony is that when people buy shares, they follow the price of sale of one share, they don't usually try to calculate the future value of dividends. A case in point would be Amazon. However, with Amazon, people expect dividends at some unspecified point in the future.
Thus, they are net producers of useful amino acids.
The ASF and china's pig issue has been known for since 2018. Unless the economist, bloomberg, washingtonpost, etc are not mainstream.
https://www.economist.com/china/2018/09/06/african-swine-flu...
https://www.bloomberg.com/graphics/2019-eliminating-african-...
https://www.washingtonpost.com/world/china-races-to-corral-a...
https://www.vox.com/2019/6/6/18655460/china-african-swine-fe...
Do you think you can compete with that big investment outfit that has people working on this stuff full time?
Note I said can. Reading the 10k and 8q and other such forms to find those opportunities is boring. I get paid very well to write software instead and just let an index fund grow my money. I can't live off my investments yet, but when they grow enough I'll be able to [substitute any of a number of hobbies I might get interested in], and it won't be a full time job moving money around.
Sounds like a legit strategy, but it also sounds like part of it is actively not competing with them.
It was possible to gain by trading on this info when it was news. For the big players, that was 18 months ago, so by now the opportunity to meaningfully trade on this info is exhausted.
For any new information, you can trade on it if you get it at the same time (or before) as the big players, and you can't if you lose in the competition of timely analysis.
Actually this news was tradable by both small and big players. It is larger than all the big traders combined after you factor in risk tolerance.
That is nobody sane puts all their eggs in on basket. There was always the risk that vaccine efforts would have found a vaccine for the disease and stopped it in is tracks. There have always been diseases, most don't spread fast enough to be a problem and it isn't clear in advance which are a problem and which are not.
Emphasis mine.
* Pigs and how to make a buck because of all the ones dying in China. I'm not seeing any good suggestions about how to profit from that for small investors.
* bluGill's suggestion that they can compete with big actors by not competing with them, by looking at deals that are too small for the big fish to be interested in.
The latter seemed an 'in general' strategy and not related to the specific situation with the pork and broader meat industries.
There’s lots of good reasons to invest passively but being unable to compete with big funds isn’t necessarily one of them.
doesn't sound like the world of "tiny volumes", but something that moves pretty big markets, which is hardly an under-the-radar trade.
buying individual stocks is not akin to gambling.
i buy what i personally like and use and have made substantially more than the market on Apple, Amazon, Starbucks, PayPal, etc. am I a professional equity analyst? no. but is this "gambling"? I don't think so.
Gambling is taking on excess risk for excess profit, especially when the odds are against you (expected value is negative). This could be poker or active trading. It's gambling.
It’s odd when I find HN to be so risk adverse when working in tech is all about risk. Fortunes are made with risk. Then as an industry we’re apparently all just degenerate gamblers if buying and holding Apple stock is akin to playing roulette.
It’s akin to roulette in that it’s statistically non-optimal, not that the level of risk is the same.
HN readers tend to be focused upon evidence and mathematically inclined.
> Or take any compensation in the form of equity in one company, even at a large one.
Public stocks are liquid enough that you can sell them as soon as possible and immediately "cash out", so any equity-based compensation at a public company can reasonably be treated as cash. The same applies to a private VC-backed company with an upcoming IPO, though obviously there is a little bit more risk involved there.
As for big-company equity, I'm happy to take RSUs in a FAANG , and sell them the day they arrive. Nothing radical there.
Of course it is, because you can't predict the future. You could have just as easily lost money investing in individual stocks, even ones that seemed like no-brainers at the time. Why do you think you're better than most other investors at making those investment choices?
But if that is your definition of gambling then every human gambles every single day just by living.
Personally I don’t think minimizing risk as far as I can is a particularly enlightened or interesting way to live ones life, but to each their own.
Certainly this past decade rewarded risk takers.
I would indeed argue that this is the case, but that's probably not useful for the purposes of this discussion. :)
> Personally I don’t think minimizing risk as far as I can is a particularly enlightened or interesting way to live ones life, but to each their own.
That's perfectly fine, and I'm not trying to dissuade you or anyone else from actively trading if it is interesting and enjoyable to you. (FWIW I have also made very good returns doing this in the past, and had a lot of fun doing it—I only stopped because my risk tolerance changed.) But, except in specific circumstances[0], to call it anything but gambling is a bit disingenuous, and statistically speaking, you will most likely underperform the market.
[0]: In particular, if you have something that most other investors don't, such as data/information, faster algorithms, etc, it's entirely plausible that you can have an edge on the market and tip the odds in your favor. But this does not describe the vast majority of investors, let alone individuals doing this in their free time.
More importantly are you suggestinging individuals buy and weight all components of an ETF like VOO (500 stocks) themselves? Pretty ridiculous. Tracking error is real and there is an extreme time cost which makes hypothetical strategies like that unreasonable for most investors.
I also just don’t understand what your comment has to do with mine in the first place.
You said "statistically you will achieve lower returns" which I pointed out is impossible mean wise due to the added fees.
Yes, if you used a no fee broker to buy and sell (everyday...) the constituent 500-5000 stocks typically in a large index fund you could avoid the very low management fee.
In practice, that’s ridiculous. The management fee on a good ETF is less than pennies on the dollar. It’s the full time jobs of many people to do this. It takes a lot of time. If you tried to replicate it yourself on an individual basis there would be significant opportunity costs as well as far increased tracking error, as well as other things I’m probably not thinking about off the top of my head. There is a reason no one does that.
If it’s gambling so be it. I guess I gambled and won.
Not OP, but the simple answer is: “because my returns over the years prove that I can.” I’ve heard this question enough times over the years that I usually just ignore such silly questions and go back to buying deep-in-the-money AAPL calls. Conversely, if it makes one feel better, continue to tell yourself individuals can’t beat the market (which is mostly true).
But I could make the same argument as to why my "strategy" playing slots or roulette is good, but in reality it just means I've gotten really lucky, and I might wipe out all my earnings in the span of an hour if that luck suddenly turns. That's not to say there aren't legitimately profitable trading strategies—"you can't beat the market" is, strictly speaking, demonstrably false—but "buy stocks of companies I like" is not one of those, and is entirely equivalent to gambling.
Anyway, I have little desire to repeat the same old arguments, nor convince anyone else. However, one might consider the differences between a slot machine (which tells you up front that you will lose money in the long term, and has no stop orders) and trading equities. Or don’t, matters little to me because I have no argument to win.
If you take a few million people and have them invest in put or call options every year, you're still going to have some streaky winners after 20 years. Very few individual investors I have talked to have convinced me they are even tracking results well enough to back their claims of outperformance.
I guess you mean that they spread their investment among all companies that belong to an index. But that doesn't solve the problem of too much liquidity.
Weighting seems surprisingly important, yet almost never mentioned by index proponents.
Especially as their total cap comes to represent a broader proportion of the total market.
Just buy shares that are good for the long term.
I don't know that the global warming story has something like that yet, but I'm no expert so I really don't know.
https://www.indexmundi.com/commodities/?commodity=pork&month...
I'm looking at this for hog prices: https://tradingeconomics.com/commodity/lean-hogs - does this reflect the pork prices you are describing about?
Indeed. It's quite hit miss though.e.g. I called the supermicro stuff right. Made money. Tried same on amd spectre and got burned.
Each time relying on hn being ahead of the knowledge curve
But it’s not even enough to know before it’s common knowledge, don’t you have to know before investors with big pockets know (and buy, and drive up the price)? That’s a taller order since those investors have people whose job it is to know this stuff well before it becomes common knowledge.
I noticed a stock was up ~60% one morning not too long ago, and when I looked for news, it turned out that they just had their drug approved by the FDA. But it continued to rise throughout the day, and eventually leveled off at about triple what it had been the previous day.
The approval of a drug is about as clean and discrete a piece of market moving information as you can get, and yet anyone who could put it in context had hours to buy. That shouldn't make people go "oh, there are always exceptions", but "hmm, maybe a fundamental assumption somewhere is wrong".
I mean, presumably people are using ML and inside information to the hilt, as much as they can, in today's market. But the consequences aren't what people think.
I am not so optimistic. Climate change discussions, a couple notable exceptions (Trump, Bolsonaro, Morrison) aside, generally has recognized that animal protein and the efforts required to create it (deforestation for growing food, over-nitration due to feces used as fertilizer) are no longer sustainable. I can very well imagine massive bans or quotas as a result, the Dutch government is actually forced to do something to reduce their CO2 contributions by their Supreme Court.
I only perennially bring this up, because one time I was interested in what the numbers might be, and I looked up the National Resources Defense Council estimates were for the economic impact of global warming in ~a half century. The rather startling figures were only a few dollars per gallon of gas. Not to be at all precise, by "a few" I mean 1-10. Not, it seems to me, qualitatively different that the difference between US and European gas prices. Obviously people still eat meat in the EU and haven't radically changed their lifestyle.
I'm not saying that therefore we should not stop climate change, just that as far as I know, the NRDC is reasonably reputable, not a nest of deniers, and they didn't seem to be supporting an economic case for major changes to everyone's lifestyle. That should be shocking, or at least require some resolution.
Some people do have the opinion that mainstream sources downplay the consequences of global warming so as not to be too alarmist, and in fact we can't be too alarmist because it really is too late. Maybe that is correct, but when there is such a disconnect and people just don't talk about it most of the time, it deeply worries me. Not just the idea that the world might be ending and we aren't resolving how to prevent it, but that maybe nobody who is talking about these things is serious at all.
Bullets of the thesis were:
- African Swine Fever in China is putting half the global supply of hogs at risk.
- It will take years for China to get a handle on the disease.
- This will cause prices of pork in China to rise. China will have to import pork to fill the hole in order to avoid a political crisis.
- As a result, global proteins will enter a multi-year up-cycle. All proteins (beef, chicken, pork) will benefit.
This structural thesis could be played many, many ways.