Commodity price fluctuations have once again become severe, with many long-term investors continuing to anticipate additional moves in either direction for multiple commodities. Additionally, many consumers are noticing higher and ever-increasing food prices.
For investors that are looking for a commodity based inflation hedge, agricultural commodities and the farmland necessary to produce and other methods of hedging potential currency devaluation or future commodity price spiking. Some investors are calling out farmland as one the best inflation hedges for investors. They believe that coming agricultural price increases are inevitable, and that the demand for food will continue to grow at a rate outpacing the ability for technological advancements to farming to increase crop yields.
Below, listed in alphabetical order, are eight agriculture-based equities that are publicly traded within the United States, though their businesses are not necessarily exclusively, primarily or even partially located in the United States. For each, I have provided a brief description, their market capitalization and a recent performance chart.
Adecoagro S.A. (AGRO) Adecoagro plants, harvests, and sells grains, oilseeds, rice, and fibers including wheat, corn, soybeans, cotton, and sunflowers, as well as offers grain warehousing/conditioning, and handling and drying services to third parties. It also engages in the production of raw milk, cultivation of coffee and fattening of cattle throughout South America, including Brazil, Argentina and Uruguay. The company has a market capitalization of about $1.25 billion.
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Archer Daniels Midland (ADM): Archer Daniels Midland is one of the world's largest processors of oilseeds, corn, wheat, cocoa, and other feedstuffs and is a leading manufacturer of vegetable oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. The company also has an extensive grain elevator and transportation network to procure, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, oats and barley. The company has a market capitalization of about $21 billion.
Bunge Limited (BG): Bunge is a world-leading oilseed processing company based on processing capacity. It is the largest producer and supplier of fertilizer to farmers in South America based on volume and a leading seller of packaged vegetable oils worldwide, based on sales. Bunge also has a growing presence in the sugar and sugarcane-based ethanol industry, including being the third largest sugar and ethanol producer in Brazil. The company has a market capitalization of about $9.8 billion.
Calavo Growers (CVGW): Calavo Growers procures and markets avocados and other perishable commodities, and prepares and distributes processed avocado products. The company principally procures its avocados from California, Mexico, and Chile. The company has a market capitalization of about $399.6 million.
Chiquita Brands International (CQB): Chiquita is a leading international marketer and distributor of bananas and other fresh produce sold under the Chiquita and other brand names in over 70 countries. Chiquita also makes packaged salads sold under the Fresh Express brand name, among others, primarily in the United States. The company has a market capitalization of about $404 million.
Cresud (CRESY): Cresud is an agricultural company based in Argentina, with a growing presence in Brazil and other Latin American countries, that is engaged in the production of basic agricultural commodities. The business presently primarily concentrates on crop, beef cattle and milk production. The company has a market capitalization of about $635 million.
Fresh Del Monte Produce (FDP): Del Monte is involved in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce together with prepared food products, including prepared fruit and vegetables, juices, beverages and snacks. The company has a market capitalization of about $1.3 billion.
The Andersons (ANDE): The Andersons is a farm products company that operates in six segments: Grain, Ethanol, Rail, Plant Nutrient, Turf & Specialty, and Retail through its stores that service Ohio. The company has a market capitalization of about $895 million.
So far this year, six of the above-mentioned seven companies are up at least five percent, and four are up at least ten percent. The only listed company that is down from the start of the year is FDP, which spiked down after reporting a Q4 2011 loss that included increased fuel costs and lower prices in Europe.
Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.