Given the drought, scary-low ending grain stocks, and record farm incomes, how much longer will...

Given the drought, scary-low ending grain stocks, and record farm incomes, how much longer will the companies selling stuff to farmers underperform the broader market? The Agribusiness ETF (MOO) has had a decent summer, but has fallen behind the S&P by 2000 basis points over the last year. Top holdings include: Monsanto, Potash, and Deere.
Comments (2)
  • Jeffrey Notaro
    , contributor
    Comments (9) | Send Message
    MOO is made up of the companies that provide equipment, goods and services to the agribusiness community. In the long view, increased farm profits and enlarging of the farming industry will mean greater profits for these companies. But, they are also beholden to short term swings in farmer expenditures, such as this year the drought will lower incomes and curtail expansion of farm operations. A much more direct way to invest in the agriculture based bull market is farmland. Land prices have almost continuously gone higher without regard to the stock market or economic conditions - it is truly non-correlated and rising based on strong fundamentals that should persist for many years.
    13 Sep 2012, 03:02 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (1408) | Send Message
    Eastern corn belt here...every farmer I have spoken with claims their spending habits will not change over the next year. That isn't speaking for the whole farming community though. They did mention they probably won't use as much potash. Some area worried of potential seed shortages.
    13 Sep 2012, 07:13 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs