The following seven investments represent a way to capitalize on rising agricultural commodity prices now. But beyond the short term, they are also all decent long-term investments for investors either looking for a bit of exposure to agriculture for diversification or in income-oriented portfolios where investors are pursuing low-risk dividend trades:
At roughly $50 billion in market capitalization, Nutrien is one of the largest dedicated agricultural companies on the planet. While some diversified chemicals companies produce fertilizer or pesticides, NTR is wholly focused on agricultural products and financial solutions for the farmers that needs these materials.
Founded in 2018 after the merger of two smaller specialty chemicals companies, Nutrien is an agricultural stock that dominates its niche and has the scale that makes it hard for others to compete. Small wonder that in this risk-off environment, NTR stock has gained more than 10% in 2022 as of June 17, thanks to a reliable business and continued upside amid the commodity supercycle lifting agricultural producers.
Bunge is one of the largest agribusiness processors in the world, serving all parts of the food value chain. To begin with, the company purchases grains, oilseeds and other goods directly from farmers. Then it stores and transports those agricultural products around the world via its logistics arm. Next, it processes these commodities via milling, crushing and other refining procedures to turn the crops into material that is more appropriate for end users and commercial organizations. Finally, it packages and sells these goods to both businesses and consumers.
BG is not up as much as some of the other investments on this list, with \"only\" 5% returns year to date in 2022. But its front-to-back agricultural business model, along with deep relationships and global scale, makes it an incredibly stable option. And right now, BG stock yields about 2.5% as a bonus above share price returns.
Another agribusiness giant is ADM, a multinational agricultural processor that provides plant-based elements for consumer foodstuffs, as well as animal feed and industrial biosolutions. Though based in Chicago, this nearly $50 billion heavyweight procures, transports, stores, processes and sells commodities around the world, including in Europe and South America.
Turning to ETFs, MOO is a mainstay of any portfolio that is looking for diversified exposure to agricultural companies. With an inception date of 2007 and almost $2 billion in assets under management, or AUM, the VanEck Agribusiness ETF is a go-to name for many investors. And with an awfully clever ticker symbol, it's pretty hard to forget once you learn about the details.
This ETF's mission is to invest in companies that make the lion's share of their revenue from agricultural-related chemicals, animal health products, irrigation equipment, farm machinery and the like. Right now, the portfolio is about 55 stocks strong, and its top holdings include global chemicals giant Bayer AG (BAYRY), iconic tractor manufacturer Deere & Co. (DE), and animal and livestock health care provider Zoetis Inc. (ZTS).
If you're looking for diversified exposure to agricultural commodities instead of the publicly traded companies that service the industry, then take a look at this Invesco fund with more than $2 billion in AUM. DBA seeks to track changes in an index made up of the most heavily traded agricultural commodity futures. That currently includes wheat, corn, soybeans and sugar among the top positions.
That said, you can't argue with the 2022 performance as this agriculture fund is up more than 10% on the year through June 17 even as the typical large-cap stocks have moved more even further in the opposite direction.
Right now, the fund is weighted about a third in wheat futures with September 2022 expiry, a third in December 2022 and a third more in December 2023. This gives you a decent span of time to avoid short-term price volatility but still play the medium-term upside in agricultural commodities.
You can download the complete list of all 40+ agriculture stocks (along with important financial metrics such as price-to-earnings ratios, dividend yields, and dividend payout ratios) by clicking on the link below:
FMC Corporation is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products. Through acquisitions, FMC is now one of the five largest patented crop chemical companies.
Archer-Daniels-Midland is the largest publicly traded farmland product company in the United States. Its businesses include processing cereal grains, oil seeds, and agricultural storage and transportation.
\"I think the best approach to the bull market in agriculture is by betting on a basket of ag-related stocks, because when farmers make a lot of money, they pour it into seeds, equipment and fertilizer,\" he added.
Is it just me, or does time fly We're already in the second half of the last month of 2022. This means it's time to look into 2023. One of the topics we discussed most in 2022 is agriculture. What started with a demand-driven bullish thesis in 2020 quickly turned into a red-hot agriculture bull market with severe supply issues. In this article, I will give you my outlook for the next year. We'll cover tight commodity supply, fertilizer prices, farm financials, and several stocks that I either own or have on my watchlist.
The combined global ending stocks of corn, wheat, and soybeans are forecast to decline for the fifth straight year in 2022/2023. For the 2023 harvest, the futures market is currently offering what would historically be considered very strong prices. But when accounting for all the line item production cost increases, profitability pencils out near breakeven, at best.
It's a period where farm production is strong. The input costs have been up pretty dramatically as well. So that's creating a bit of pressure on the margins for agricultural producers. And it's a period where the momentum of increases in farmland values has been maintained, even if there's a slight trailing off from the very fast rates of increase that we've seen in the past year.
Affectionately known as Farmer Mac, the Federal Agricultural Mortgage Corp. (NYSE:AGM) provides low-cost financing to agricultural lenders and those participating in agribusiness.
Archer-Daniels-Midland is vertically integrated. It uses huge grain elevators, transportation networks and port operations around the world. This is to buy, store, clean and transport agricultural commodities. This scale helps it manage costs to stay competitive.
Traditional agricultural investments focused on companies directly involved in farming, processing crops, or selling equipment to farmers, but the impending impacts of climate change, ecological damage, and population growth have made the industry dependent on science to maintain sustainability and the bottom line. Some of the best publicly traded agricultural companies are the ones that leverage advanced technology and valuable data.
Founded as Deere & Company in 1837, the company began by manufacturing plows, pitchforks, and other farming equipment. John Deere was made famous in the early 20th century for its state-of-the-art tractors, and it quickly became a global leader in the agriculture industry. John Deere is one of the most innovative agricultural companies because of its responsiveness and adaptability to the needs of farmers.
Another company focused on manufacturing agricultural auxiliaries is Caterpillar, Inc, an American firm that develops industrial technology and sells farming and earthmoving equipment. There's a high chance you caught a glimpse of the 'CAT' logo if you've ever passed by almost any construction site in the world.
Investors who are looking to gain broader exposure to agriculture commodities should consider adding an agricultural exchange-traded fund (ETF) to their portfolio. While agricultural commodities futures contracts are some of the most lucrative investments, they are also some of the riskiest. Investors who want their allocation to reflect the whole agriculture industry should buy shares in an ETF that aims to reflect a diversified agricultural index.
Invesco DB Agriculture Fund is one of the best ways to gain exposure to agricultural futures without taking on all the implied risk. With a relatively low expense ratio and excellent performance over the past two years, DBA seems like a good investment as its upward trend is projected to continue into the future.
The agriculture sector is an evergreen sector of the economy. The world will always need food, and the companies in this sector help ensure the world is fed. In fact, agriculture stocks are typically considered to be in the same category as consumer staples because demand remains constant no matter what is happening in the broader economy.
The last agricultural stock on this list is Farmland Partners (NYSE:FPI). This is one of only two publicly traded real estate investment trusts (REITs) that provide exposure to farmland. As of this writing, Farmland Partners owns approximately 155,000 acres of high-quality farmland in 16 states. The company also offers loans to farmers.
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Syngenta ranks 6th on this list of the top 10 largest agricultural companies in the world in 2020. Syngenta is a global company that produces agrochemicals and seeds and is based in Basel, Switzerland. Syngenta conducts genomic research. Syngenta ranks third in seeds and biotechnology sales. Syngenta has eight primary product lines which it develops, markets, and sells worldwide; Its five product lines for pesticides are selective herbicides, non-selective herbicides, fungicides, insecticides, and seed care. Three product lines for seed products include corn and soya, other field crops, and vegetables. Last year Syngenta generated USD 23 billion. 59ce067264