Long Term Investment in Agribusiness

With the spreading coronavirus dominating the investment news, it is easy to forget that some investments may do better this year than last. One of these is US farming. This is not because it will necessarily be such a great year for farming but because last year was so horrible. Swine fever, another infection in China, decimated hogs there and greatly reduced the demand for US soybeans. The trade war hurt investments in US agriculture as China quit buying farm products from the USA. Then, the strong dollar made US Ag exports less competitive. And, of course, 2019 was a historically wet year in the Corn Belt delaying planting and reducing yields. So, if things might be looking up for US agriculture, what are some good long term investments in agribusiness?

What Are Agribusiness Investments?

Any business that provides tools and support for farming or buys and distributes farm products is an agribusiness. These are the top ten agribusinesses in the world.as reported by Tharawat Magazine.

Cargill: This family-owned company is the world’s agricultural and food production giant with a global reach. They are leaders in nutrition science and have food processing, storage, and distribution systems in 40 nations. They generate $107.20 billion a year in revenue.

Archer Daniels Midland Company: This company works in food processing, storage, and distribution. They are a world leader and highly respected. The company generates $62.35 billion a year in revenue.

Deere & Company: John Deere is a venerable name in the business of manufacturing farm equipment. They make very basic machinery and are moving into automated machines that are hugely productive and efficient. The company generates $18.49 billion a year in revenue.

DowDuPont: This company is the product of a merger of DuPont Chemical and Dow and is the world’s largest chemical company. They work in seed production and crop protection and the company generates $15.69 billion a year in revenue.

Nutrien: This US company is a leading producer of fertilizers based on nitrogen, phosphate, potash and sulphur. It generates revenue of $13.67 billion a year.

Monsanto: A company founded in the USA in 1901, they are leaders in biotechnology and chemistry as applied to agriculture. They make Roundup herbicide and genetically modified crops that are drought, insect, infection, and disease-resistant while having longer shelf lives. The company was taken over by Bayer in 2018. By itself it generates $13.5 billion a year in revenue.

Syngenta AG: This is a Swiss company that generates $12.79 billion of income a year. They are leaders in agrichemicals and seeds.

Bayer AG: This German pharmaceutical company that invented aspirin is a leader in crop sciences. The company makes about $11.6 billion a year in revenue.

CNH Industrial NV: This Dutch company manufactures farm and construction equipment and manages brands like New Holland and Case. It generates $10.12 billion a year in revenue.

BASF: A major supplier of herbicides, insecticides, and fungicides, this German company generates $6.55 billion a year in revenue.

Opportunities in Agribusiness Investments

Farm Folio discusses investment opportunities in agribusiness.

Many investors have been placing bets on farm automation, precision-farming solutions, crop protection systems, and other emerging technologies to help boost yields, optimize water usage, and advance fertilizer efficiency. There are numerous opportunities for such technologies to be adopted around the world.

Meanwhile, companies like Deere and CNH Industrial NV will benefit as farm yields increase along with farm income and farmers invest in increasingly efficient equipment.

The Motley Fool likes Deere & Company. Their basic argument, like ours, is that as the various factors hurting the farm economy subside this well-managed company will do very well.

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