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4 Agriculture Stocks That Will Help Your Portfolio Grow

Agriculture is a mammoth industry with stocks covering fertilizers, seeds, agricultural chemicals, farm equipment, food processing, and more. However, the industry tends to be cyclical in nature. It booms when commodity prices are high and the farmer’s income is high. But as commodity prices fall, it takes the industry down with it.

Harvests in the last four years have been near record levels. However, these higher grain inventories pressurized commodity prices, and resulted in lower farm income. Industry demand in most global markets remains at historically low levels as a result of weaker economic conditions. Deteriorating farm economics negatively impacted farmer sentiment, which in turn affected demand for agricultural equipment demand. The companies responded by tuning down production and closely managing inventories.

However, things are looking up this year with companies delivering better results and improved outlook. In 2017, agricultural exports are projected to rise 3% to $134 billion. U.S. agricultural exports are projected to account for 33% of farm sector gross earnings in 2017.

We believe the agricultural play stocks are poised to gain in the long term. Given that the global population is expected to soar to 9.5 billion by 2050, the agricultural sector faces a huge challenge to produce enough food as arable land shrinks. To meet the increased demand for food, fiber, and...