Image: Bigstock

The Zacks Agriculture – Operations industry faces persistent headwinds, including volatile commodity prices, rising input costs, trade uncertainties, and mounting operational expenses. These pressures are squeezing margins, disrupting productivity, and challenging long-term sustainability, forcing industry players to strike a difficult balance between growth and resilience.

On the brighter side, the sector is set to benefit from innovation and growing consumer demand for health-focused products. With diets increasingly shifting toward healthier options, alternative protein adoption is expected to accelerate. Growth prospects are further supported by acquisitions, joint ventures, and expansion initiatives, alongside advances in food processing, grain-handling efficiency, storage capacity, and robust demand from emerging markets.

In this backdrop, companies such as Corteva Inc. (CTVA - Free Report), Archer Daniels Midland Company (ADM - Free Report), Dole plc (DOLE - Free Report), and Mission Produce Inc. (AVO - Free Report) are well-positioned to capitalize on these evolving trends.

About the Industry

The Zacks Agriculture – Operations industry comprises companies that produce or procure, transport, store, process, and distribute agricultural commodities to consumers. It also distributes ingredients to other parts of the agriculture industry (including clothing, animal feed, energy, and industrial products). Some industry players engage in dairy operations, land transformation activities, and the development of food ingredients using gene-editing technology.

The industry encompasses production activities related to the traditional farming of crops (like corn, soybean, wheat, and cotton), as well as livestock and poultry products (including meat, dairy, and eggs). The products are mainly sold at grocery stores or exported overseas. These are also used as feedstock for other industries. For example, cotton is used in the clothing industry and corn is used in the ethanol industry.

Factors Shaping the Future of Agriculture - Operations Industry

Agricultural Export/Import Projections: The August 2025 outlook of the U.S. Department of Agriculture projects agricultural exports of $173 billion for fiscal 2025 (ending Sept. 30, 2025), up $2.5 billion from the May forecast of $170.5 billion. The uptick is primarily driven by stronger grain and feed exports, partially offset by a weaker outlook for seeds.

Grain and feed exports are expected to be $39.2 billion, up $1.3 billion due to a $1.2-billion increase in corn exports, supported by higher volumes and prices. Additionally, the company expects agricultural exports of $169 billion for fiscal 2026 (ending Sept. 30, 2026). Meanwhile, U.S. agricultural imports for fiscal 2025 are projected at $220 billion, unchanged from the May forecast.

Organic Products & Innovation in Focus: The industry has gained from rising consumer demand for healthier food, prompting a shift toward organic farming practices, as well as reduced use of chemicals and pesticides. Innovations in food processing, enhanced grain-handling techniques, increased storage capacity, and strong demand from emerging markets are driving growth.

As healthy eating trends expand, alternative protein consumption is expected to rise. To align with trends in food security, health, and well-being, industry players are prioritizing productivity and innovation. Companies are also investing in acquisitions and joint ventures to create high-quality ingredients and solutions that meet the growing demand for healthy products.

Elevated Costs: Agricultural companies face rising costs due to fluctuating commodity prices, inflation-driven input increases, and trade uncertainties, all of which are squeezing profitability. Inflation-driven surges in input costs are significant challenges, raising production expenses and narrowing margins. To combat these pressures, companies have adopted pricing strategies and improved supply-chain resilience through partnerships and distribution initiatives. However, commodity cost inflation is expected to persist, maintaining pressure on margins in the near-term.

Additionally, companies are managing higher SG&A expenses, driven by performance-related compensation, project costs, and technology investments to stay competitive. These elevated operating expenses and ongoing SG&A deleverage may continue to weigh on profitability.

The Zacks Industry Rank Indicates Dull Prospects

The Zacks Agriculture – Operations industry is within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #158, which places it in the bottom 36% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries resulted from a negative aggregate earnings outlook for the constituent companies. Looking at the aggregate earnings estimate revisions, analysts have been gradually losing confidence in this group’s earnings growth potential.

Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock market performance and valuation picture.

The Industry vs. the Broader Market

In a year, the Zacks Agriculture – Operations industry has underperformed the Zacks Consumer Staples sector and the S&P 500.

The stocks in the industry have collectively declined 8% in a year, compared with a 6.3% dip for the sector and 18.9% growth for the Zacks S&P 500 composite.

One-Year Price Performance
 

Image Source: Zacks Investment Research

The Agriculture - Operations Industry's Valuation

On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing Consumer Staples stocks, the agriculture – Operations industry has been trading at 13.21X compared with the S&P 500’s 23.36X and the sector’s 16.51X.

Over the last five years, the industry traded as high as 17.59X, as low as 10.96X, and with a median of 14.38X, as the chart below shows.

Price-to-Earnings Ratio (Past Five Years)
 

Image Source: Zacks Investment Research

4 Agriculture Operations Stocks to Keep an Eye On

Presented below is a rundown of the previously-mentioned stocks to watch.

Corteva

This Wilmington, DE-based pure-play agriculture company is poised to drive above-market growth through its industry-leading product pipeline, as well as its rigorous approach to innovation and operating discipline.

It is poised to accelerate its pace of innovation and existing leadership position in the high-value sector to meet the increasing market demand for naturally derived products through three new collaboration agreements. Strong price execution in seed, supply-chain flexibility, and solid market demand for its balanced and differentiated new product portfolios drive Corteva's performance.

The Zacks Consensus Estimate for Corteva’s 2025 earnings has moved up 1.3% in the past seven days. The Zacks Consensus Estimate for its 2025 sales and earnings suggests growth of 4% and 23.7%, respectively, from the year-ago period’s reported figures. The company has delivered a negative earnings surprise of 4.4%, on average, in the trailing four quarters. The Zacks Rank #1 (Strong Buy) rated stock has risen 8.8% in the past year.

Price & Consensus: Corteva
 

Image Source: Zacks Investment Research

Mission Produce

This Oxnard, CA-based company is engaged in sourcing, farming, packaging, marketing, and distributing avocados, mangoes, and blueberries to food retailers, distributors, and foodservice customers in the United States and internationally.

By effectively integrating its sales operations with sourcing teams, the company has demonstrated an exceptional ability to meet customer demand while optimizing per-unit margins. This alignment allows Mission Produce to leverage a sustained higher pricing environment, ensuring profitability and consistent performance in its Marketing and Distribution segment.

The Zacks Consensus Estimate for Mission Produce’s fiscal 2025 earnings has moved up 13.6% in the past 30 days. The Zacks Consensus Estimate for its fiscal 2025 sales suggests growth of 12.1% from the year-ago period’s reported figure, and the estimate for earnings implies a decline of 9.5%. The Zacks Rank #2 (Buy) rated company has delivered a significant earnings surprise, on average, in the trailing four quarters. The stock has declined 4.6% in the past year.

Price & Consensus: Mission Produce
 

Image Source: Zacks Investment Research

Archer Daniels

This Chicago, IL-based agricultural product company’s leadership in critical global trends, such as flexitarian diets, nutrition, and sustainable materials, has contributed to its momentum. Its focus on investing in assets and technological capabilities to serve customers efficiently is likely to be a significant growth driver.

Solid demand, improved productivity, and product innovations have been aiding the company. Its Readiness program, positive cash flow, and solid performance at the Nutrition unit have been supporting the results. The Zacks Rank #3 (Hold) rated company has been progressing well on its three strategic pillars — optimize, drive, and growth.

Archer Daniels is poised to benefit from the robust performance of its Nutrition segment, owing to significant gains in the Human and Animal Nutrition units.

The Zacks Consensus Estimate for the company's 2025 earnings has been unchanged in the past 30 days, at $4.02 per share. The Zacks Consensus Estimate for Archer Daniels’ 2025 sales and earnings suggests declines of 2.1% and 15.2%, respectively, from the year-ago period’s reported figures. It delivered an earnings surprise of 0.1%, on average, in the trailing four quarters. The company has lost 0.2% in the past year.

Price & Consensus: Archer Daniels
 

Image Source: Zacks Investment Research

Dole

This Dublin, Ireland-based global leader in fresh produce is poised to benefit from improved logistical efficiencies in several areas, which brought increased stability to its core fruit business. The company’s diverse sourcing network and advanced farming practices are likely to help overcome the weather challenges in various regions. Dole benefited from a healthier supply and demand balance, which allowed for a better pricing environment in Europe and much-improved selling conditions in the non-core markets.

The Zacks Consensus Estimate for Dole’s 2025 earnings has been unchanged in the past 30 days. The Zacks Consensus Estimate for its 2025 earnings suggests a decline of 18.9% from the year-ago period’s reported figure. The Zacks Rank #3 (Hold) rated company delivered an earnings surprise of 25.4%, on average, in the trailing four quarters. The stock has declined 18.5% in the past year.

Price & Consensus: Dole
 

Image Source: Zacks Investment Research 

More By This Author: