Analyzing Trends: Best Agriculture Stocks for 2024 to Fortify Your Portfolio

As the calendar had flipped toward 2024, savvy investors are “analyzing trends best agriculture stocks for 2024” to discover the best agriculture stocks poised for growth. Technology, sustainability, and demand are forming the bedrock for potential windfalls in the sector.

Which companies are maneuvering to capitalize on these trends? We’ve narrowed down the contenders to help fortify your portfolio with informed choices.

Understanding Key Trends in Agriculture Stocks for 2024

The agriculture sector is a vibrant field, rife with innovation and driven by global trends. The industry’s integration with technology is a key factor propelling its growth. Here are some key trends driving the agriculture industry forward:

• The smart agriculture market is poised to grow at an impressive 9.4% CAGR until 2028.
• Sustainable farming practices are becoming increasingly important.
• There is a growing global demand for agricultural products.

In an era of economic uncertainty, the ability of the agricultural sector to perform during downturns is crucial. Understanding these market trends and assessing the sector’s resilience in the face of economic challenges is key to identifying lucrative investment opportunities.

Technology Advancements

The agricultural industry is experiencing a technological renaissance. Innovations in precision agriculture, digital tools, and automation are transforming the sector, creating investment opportunities ripe for the picking. Upgrades in precision agriculture techniques and digital tools for farmland management are revolutionizing traditional farming practices, positioning the agriculture industry as a sector on the cusp of a technological breakthrough. This progress also extends to lawn and garden care, where similar advancements are being made.

Companies are harnessing these technological innovations to drive growth. For instance, Deere & Co. is developing driverless tractors and smart herbicide spraying, demonstrating the application of automation and digital tools in agriculture. The merger between AGCO and Trimble exemplifies the potential of technology in agriculture, highlighting the strategic approach to expanding long-term sales beyond traditional machinery.

Sustainable Farming Practices

Sustainability is no longer a buzzword in the agriculture industry; it’s a necessity. Sustainable farming practices, also known as sustainable practices, have significantly improved crop yields while reducing environmental impact, indicating a broader movement towards sustainability in agriculture. This shift is evident in the rising momentum of organic farming, a key aspect of sustainable agriculture. Advancements in biotechnology and an uptick in genetically modified crops are driving this trend.

Innovations in the plant-based meat industry are also encouraging sustainable dietary shifts. Efforts to refine taste and cost are inciting consumer interest, indicating growth potential in this sub-sector of sustainable agriculture. Furthermore, the expansion of sustainable farming practices is anticipated to enhance the production of commodities like corn and soybeans, potentially mitigating food inflation.

‍

Global Demand

The agriculture industry is experiencing a surge in global demand, driven by an increasing global population, changing dietary preferences, and the interconnected nature of the global economy. As we aim to feed a projected population of 9.7 billion by 2050, the demand for agricultural products is expected to rise, ensuring a continuing demand for agriculture stocks.

Investments in agriculture that reflect the returns of owning farmland or offer broad exposure to the agriculture sector are crucial for investors focused on long-term growth. These considerations, coupled with the increasing global population and food demand, make the agriculture sector an area of interest for investors.

Top Agriculture Stocks to Watch in 2024

Identifying the best agriculture stocks in the agriculture sector is key for potential investors. This section will spotlight four companies that represent promising stock picks for 2024:

1. Corteva Agriscience
2. Nutrien
3. Deere & Company
4. Bunge Global SA

These companies have demonstrated strong financial performance, growth potential, and strategic positioning in the agriculture market.

Each of these companies operates in a unique segment of the agriculture industry, offering investors the opportunity to diversify their portfolios. Whether it’s:

• Corteva Agriscience’s strides in operating EBITDA
• Nutrien’s position as a leading fertilizer producer
• Deere & Company’s focus on technological innovation
• Bunge Global SA’s diversified product offerings

Each company presents a unique value proposition for potential investors.

Corteva Agriscience

Corteva Agriscience, a leading player in the agriculture market, has demonstrated strong financial performance. Looking forward, the company’s projected net sales for 2024 are estimated to be between $17.4 billion and $17.7 billion, with Operating EBITDA targets ranging between $3.5 billion and $3.7 billion. The company also plans to repurchase approximately $1.0 billion of its shares, reflecting its strong growth potential and a positive net income outlook.

The growth of Corteva’s Seed segment is also noteworthy, with a 5% increase in net sales driven by a significant 13% rise in global prices.

Nutrien

Nutrien, a Canadian fertilizer company, commands a noteworthy position in the global agriculture market. Here are some key facts about Nutrien:

• It is the largest producer of potash globally.
• It is the third largest producer of nitrogen fertilizer globally.
• It recorded adjusted EBITDA of $7.1 billion in 2021, reflecting its substantial scale in the agriculture sector.

Nutrien has a diverse global presence with over 2,000 retail locations spanning North America, South America, and Australia. Recently company expanded further by acquiring the Brazilian retail fertilizer company Casa do Adubo, indicating its robust growth trajectory.

Nutrien’s strong financial position makes it a key player to watch in the agriculture stock market.

Deere & Company

Deere & Company (also known as John Deere) is another major player in the agricultural stock market. corporation is focusing on developing driverless tractors and smart herbicide spraying technology, indicating its commitment to leveraging technological advancements in the agriculture industry.

The company’s strategic focus on innovative technology not only positions it as a leading player in the agriculture sector but also underscores its potential for growth and profitability. By aligning its operations with key trends in the industry, Deere & Company offers investors an attractive proposition in agriculture stocks.

Bunge Global SA

Bunge Global SA, a global agribusiness and food company, offers a diversified range of product offerings. This diversification, combined with strong financial performance, positions Bunge Global SA as a compelling investment option in the agriculture sector.

Company reported EPS $1.68 for Q1 2024. Meanwhile, adjusted EPS equaled $3.04 for the same quarter. These figures indicate the company’s robust financial performance during the same period and its potential to continue delivering strong results in the future.

Bunge Global SA’s diverse product offerings and solid financial performance make it a top agriculture stock to watch in 2024.

Emerging Opportunities in the Agriculture Sector

As the world continues to evolve, so does the agriculture sector. Emerging opportunities in plant-based meats, vertical farming, and biologicals present potential avenues for growth and profit in the industry. These sectors are at the forefront of innovation, meeting the growing demand for sustainable and efficient farming practices.

Investors ready to venture into these emerging opportunities can tap into the potential of these vibrant segments. Some of the key areas to consider are:

• Plant-based meats, which offer taste and cost refinement
• Vertical farming, which provides water efficiency and high productivity
• Biologicals, which offer a sustainable alternative to chemical pesticides

These sectors are primed for growth in capital markets, especially in emerging markets and major markets.

Plant-Based Meats

The plant-based meat industry presents a promising growth opportunity in the agriculture sector. Here are some key statistics:

• Global retail sales of plant-based meat products reached $6.1 billion in 2022
• This indicates substantial growth potential outside the U.S.
• There was a slight decline in U.S. retail sales

The plant-based meat segment could potentially mirror the success of plant-based milk, which has captured 15% of its market. This suggests a prospective $15 billion opportunity in U.S. retail. With new entries in sub-categories such as chicken, seafood, and jerky, the plant-based meat industry signals growth potential in these areas.

An interesting fact, however, is the information that Beyond Meat - the most famous company in this category, has their share price ~95% below the peaks...

Does this mean the beginning of the end of "meatless meat"? Time will tell, however, taking into account consumer trends and the impact of pig and cow farming on the environment, it looks like a proverbial little bug in the system, not the beginning of the end of an industry that is just starting to become a rising star.

Vertical Farming

Vertical farming is another emerging opportunity in the agriculture sector. The demand for fresh, locally produced food is expected to drive the expansion of vertical farming. Lettuce, for instance, is becoming a popular crop choice in vertical farms due to its suitability for the systems and high market demand.

Aquaponics is emerging as a growth mechanism within vertical farming, noted for its water efficiency and high productivity. Despite the operational challenge of managing energy consumption, there are opportunities in vertical farming for reduced environmental impact and potential markets in the Asia-Pacific and Middle East.

Are you curious about real life examples? One of the large market players operating in this field is Village Farms International (NASDAQ:VFF). The company is a prominent agricultural producer specializing in greenhouse-grown produce and cannabis products. With its strategic expansion into the cannabis market, the company aims to capitalize on the growing demand for both medical and recreational cannabis products.

Biologicals

Biologicals represent an exciting opportunity in the agriculture sector. The market for agricultural biologicals is set to nearly double in size, expanding from $14.7 billion in 2023 to an estimated $27.9 billion by 2028. Bioceres Crop Solutions’ recent revenue increase due to an above-average crop season in South America, particularly in Argentina, and high demand after a severe drought reflects the potential of this sector.

Competitive markets for agricultural biologicals are emerging in Europe and the Americas, with stringent regulations and significant consumer demand for sustainable products driving this trend. The fastest-growing segment within agricultural biologicals is the market for bio nematicides, aimed at managing nematode-related crop losses. Bioinsecticides are also gaining popularity as a sustainable alternative to chemical pesticides, with North America being a notable market.

ETFs

Of course, one should also not forget, also in this context, about ETFs. ETFs hold assets such as stocks, commodities, or bonds, and they typically aim to track the performance of a specific index. Investors prefer ETFs for their liquidity, cost-efficiency, and diversification benefits - which are extremly interesting also in terms od agriculture sector.

Scrab provides tools for analyzing various ETFs, helping investors make informed decisions based on performance metrics and market trends. By using our comprehensive analysis features, investors can compare different ETFs to optimize their investment portfolios.

Risks and Challenges Facing Agriculture Stocks

Investing in agriculture stocks, while promising, does not come without risks and challenges. Agriculture stocks can be affected by volatility in commodity prices which may influence long-term economic growth, especially for commodity exporters. Additionally, agricultural production risks such as crop shortfalls, liquidity problems, and unfavorable markets can significantly impact all players in the agricultural supply chain.

Extreme weather events resulting in crop losses can have serious repercussions for:

• Input suppliers
• Agricultural machinery manufacturers
• Grain traders
• Logistics companies
• The food industry

The farm business is exposed to uncertainty from a variety of factors such as weather, yields, prices, governmental policies, and global markets, which can lead to significant fluctuations in income.

Geopolitical Events

Geopolitical events can significantly impact the performance of agriculture stocks. The El Niño weather phenomenon, occurring in 2024, will impact the supply of various agricultural commodities, including:

• corn
• soybeans
• rice
• robusta coffee

This will thereby affect agriculture stocks.

China’s anticipated economic slowdown is likely to decrease the country’s demand for imported agricultural products, which could impact agricultural market dynamics and associated stocks. Additionally, recent geopolitical events, like the ongoing war in Ukraine, have heightened commodity price volatility, influencing the performance of agriculture stocks.

Regulatory Risks

Regulatory risks pose another challenge for agricultural companies. Uncertainties around regulations for chemical use increase the regulatory risks faced by agricultural companies. Environmental concerns, including rules for animal waste disposal, contribute to the regulatory challenges in the agriculture sector.

Government actions influence institutional risks in agriculture, including tax laws and the level of price or income support payments. These factors can have a significant impact on the performance of agriculture stocks.

Tips for Investing in Agriculture Stocks

Investors seeking to include agriculture stocks in their portfolios should diversify across multiple asset classes to achieve well-rounded exposure.

Here are some ways to diversify your portfolio:

• Invest in stocks from different sectors within the agriculture industry, such as crop production, livestock, or agricultural equipment.
• Consider investing in agricultural commodities, such as corn, wheat, or soybeans.
• Allocate a portion of your portfolio to agricultural ETFs or mutual funds.
• Include bonds from companies in the agriculture sector.
• Keep some cash on hand to take advantage of investment opportunities that may arise.

By diversifying across different asset classes, you can reduce exposure to the systemic risk of any one class and enhance the stability of your investment in agriculture stocks.

Summary

In conclusion, the agriculture sector offers promising opportunities for investors. Technological advancements, sustainable farming practices, and growing global demand are shaping the future of the sector. Companies like Corteva Agriscience, Nutrien, Deere & Company, and Bunge Global SA represent attractive investment options.

Emerging opportunities in plant-based meats, vertical farming, and biologicals also offer avenues for growth. However, investors should be aware of the potential risks and challenges, including geopolitical events and regulatory risks. Diversification across multiple asset classes and companies within the agriculture sector remains a key strategy in navigating the complexities of agriculture stocks.

‍