There are few things investors can be certain of, but constant and steadily increasing demand for global food supplies may be one of them.
Particularly after disruptions to global wheat and corn supplies after the 2022 invasion of Ukraine, it has become clear that agricultural commodities — and thus agricultural stocks — are an area that’s worth paying close attention to as food prices remain stubbornly high.
[Sign up for stock news with our Invested newsletter.]
If you’re watching the global commodities environment and want to share in some of the recent upside, or if you’ve simply seen the disruptions and are concerned about making sure your portfolio has a hedge against future food supply challenges, then this list of investments is for you. The following agricultural stocks and exchange-traded funds, or ETFs, all offer different ways to play the industry, with a few diversified ETFs to consider as well:
| Stocks & ETFs | Year-to-date performance (as of Aug. 21) |
| Bayer AG (ticker: BAYRY) | 6.5% |
| Deere & Co. (DE) | -8.9% |
| ICL Group Ltd. (ICL) | -17.1% |
| Nutrien Ltd. (NTR) | -15.5% |
| Zoetis Inc. (ZTS) | 23.3% |
| VanEck Agribusiness ETF (MOO) | -4.3% |
| Invesco DB Agriculture Fund (DBA) | 5.7% |
Bayer AG (BAYRY)
German sciences giant Bayer isn’t solely an agribusiness company, as its three main business lines are pharmaceuticals, consumer health and crop science. But it’s this last segment that matters most, as the firm’s last annual report notes this division accounts for more than half of all revenue. From “crop protection” products that formerly would be considered bug killers or weed killers to bioengineered seeds that produce higher-yielding plants, Bayer is a mainstay of the global agricultural marketplace. The company slumped earlier in 2023 thanks to lowered guidance, but remains a strong long-term investment — particularly given its generous yield of more than 8% that is delivered via one lump sum every summer.
Deere & Co. (DE)
You’d be hard pressed to find a more iconic name among agricultural stocks than Deere, the company behind the big green farm machinery that is so recognizable to investors and consumers alike. In its fiscal 2022, the company saw impressive revenue growth of 19%. And as we approach the end of fiscal 2023 at the end of October, the company is plotting another 16% growth in the top line. This strong momentum has resulted in a roughly 20% gain in DE stock over the last year, but it admittedly has been a wild ride over the intervening months as shares have whipsawed around — from a low of under $350 as recently as June before rising back to levels around $430 presently. The company just reported a 10% increase in net income and increased its full-year 2023 net income forecast, hinting that this world-class company is still going strong.
[READ: 7 Small-Cap Value ETFs to Buy in 2023]
ICL Group Ltd. (ICL)
ICL Group is a roughly $8 billion agricultural fertilizer company that specializes in potash and phosphate products, though it also produces some industrial products and chemicals. The company is headquartered in Tel Aviv, Israel, so like many international stocks it offers slightly less predictable dividends that fluctuate quarter to quarter. Still, the last four payments add up to a yield north of 9%. If you’re looking beyond the typical large-cap agriculture stocks or if you want to tap into agribusinesses that provide generous income, ICL is worth a look.
Nutrien Ltd. (NTR)
Nutrien is one of the largest dedicated agricultural stocks out there, with a wide range of products and services. It operates 2,000 retail-facing locations worldwide, from the U.S. and Canada to South America to Australia. Its product line spans fertilizer, seeds, farming equipment and even financial solutions for the farmers who need these materials. The stock has rolled back over the past year, slumping more than 30% even as the market has charged higher, in large part because of falling commodity and fertilizer prices. But that has been brought about by some normalization after the initial shocks caused by the Russian invasion of Ukraine in early 2022, not because of strategic missteps, and NTR remains a dominant and well-run agricultural stock.
Zoetis Inc. (ZTS)
Zoetis develops animal health medicines, including vaccines and diagnostic products that help give cattle, swine, poultry, fish and sheep farmers peace of mind about the health of their livestock. Particularly in modern agribusiness settings where flocks and herds can be quite large, the last thing a farmer wants is for an illness to break out. That means a steady demand for ZTS products. The company is also involved in pet and veterinary medicine as well, providing a bit of diversification to its revenue. Both the top and bottom line have been steadily marching higher, and the company has grown its dividend payout aggressively, with current dividends per share of 37.5 cents. That’s roughly three times the 12.6 cents paid in 2018.
VanEck Agribusiness ETF (MOO)
Turning to ETFs, this VanEck fund with the clever ticker symbol is the go-to option for diversified exposure to agricultural companies. With an inception date of 2007 and more than $1 billion in assets, it is much older and larger than other agribusiness-focused ETFs out there. Right now, the portfolio of about 50 stocks includes many of the prior names like Bayer, Deere and Zoetis among its top holdings. If you want to broadly play agribusiness but can’t make up your mind among the dedicated companies out there, this one-stop shop is a good option.
Invesco DB Agriculture Fund (DBA)
If you’d prefer to go around the companies that are just role players in the agriculture industry and instead play the broader trends behind the crops themselves, this $800 million Invesco fund is a good option. DBA seeks to track changes in an index made up of the most heavily traded agricultural commodity futures, including wheat, corn, soybeans and sugar. Commodity futures can be volatile, and in many ways are uncorrelated to the ups and downs of the stock market as circumstances like weather can have a much bigger impact than investor sentiment. However, it’s worth noting that DBA is up 5% so far this year thanks to continued inflationary pressure — outperforming some of the largest publicly traded agriculture companies out there.
More from U.S. News
Best Places to Invest in Real Estate in 2023
7 Stocks Cathie Wood is Buying
7 Agricultural Stocks and ETFs to Buy and Hold originally appeared on usnews.com
Update 08/22/23: This story was previously published at an earlier date and has been updated with new information.
