Best Agricultural Stocks To Buy In 2024

Cutout paper illustration representing scheme and Stocks inscription

Image Source: Pexels

The US stock market has gotten off to a strong start this year, with the S&P 500 hitting a record high of 4,839.81 at the start of 2024, and then continuing to climb above 5,200 this March. If you’re thinking about investing in the stock market in 2024, or are thinking about adding some diversity to your existing portfolio, it’s worth considering major agriculture stocks.

This article will give a useful overview of this vital sector, providing recent developments and current market forces within agriculture, and in addition, highlight leading agricultural and AgTech companies. 

This review is not intended as financial advice but offers background information when seeking the best agricultural stocks to buy. It also hopes to spark new or rekindle interest in one of the world’s fastest-growing business sectors, for a broader perspective on the global economy.

The Global Agricultural Sector

Agriculture stocks seldom make headlines in the financial press. One reason is, that agriculture is not seen as glamorous or as exciting, as the tech sectors. We’re all immediately familiar with companies like Zoom, Facebook, Microsoft, and Amazon, but the majority of stock market investors live in cities or suburbs, and agriculture plays a minimal role in their lives, so are not as familiar with Agco, ICL, John Deere, Bayer and Bunge. 

Agriculture is the oldest, and arguably the most dependable of all global industries. Despite anything that may happen, people will always have to eat. Even in the toughest of economies, when people refrain from purchasing consumer goods and luxuries, they still buy food staples. Agriculture stocks have a reputation for (relative) stability and reliability and can deliver profitable dividends and rewards to investors who take the time to thoughtfully research the agricultural sector. 

Understanding Farming and Agriculture Stocks

Traditionally agriculture was thought to be one step behind other industries when adopting or integrating new technologies - but all that is changing! AgTech is transforming farming at the field level. Farms are turning into high-tech environments, comparable with the latest smart factories in the high-tech sector, with dynamic and exciting agricultural products and processes, such as fertilizers, smart irrigation systems, AI-driven harvesting robots, and electric farm vehicles. 

Agricultural companies that are harnessing key technologies like predictive AI, the Internet of Things, robotics and UAVs, big data (with cloud storage and algorithms), and satellite technologies with a positive impact on agriculture. This technological revolution is also furthering sustainable agriculture and there are considerable gains to be had in the process.

Companies that can deliver reliable and affordable solutions to the key challenges facing global agriculture should be of interest to investors. There are some high-performing agriculture stocks worth considering in 2024, particularly companies that have niche footings in the wider agricultural supply chain. It is also worth monitoring the ‘tech’ end of the agricultural sector with its proliferation of AgTech startups - maybe the most promising are launching IPO’s and the best agricultural stocks to buy are a brand new one. 

Factors to Consider When You Buy Agricultural Stocks

In a free market, stock prices reflect the performance of the company as well as investor sentiment. Every industry or sector responds to a variety of market forces and agriculture is no exception. Uniquely, agriculture also depends on the ability of farmers and agronomists to anticipate and adapt to natural phenomena, because a devastating hurricane, bad harvest, or outbreak of crop disease may add to their volatility. 

Key Factors That Affect the Value of Agriculture Stocks

  • Underlying commodity prices that affect the cost of fertilizers, fuel, and other energy sources. 
  • Extreme weather events such as droughts, floods, and heatwaves.
  • Wars, conflicts, or natural disasters that impact supply and distribution chains.
  • Changes to consumer preferences, for instance, demand for organic, vegan, or ethically sourced foods. 
  • Government policies, trade deals, and tariffs regulating food imports and exports.

4 Agriculture Stocks to Consider Buying in 2024

If you’re looking for agriculture stocks in 2024 to add to your portfolio, the following 4 stocks represent an appealing selection; from major companies with agricultural divisions to businesses that supply or service agriculture. Consider whether these companies match up to your personal risk appetite and investment goals. 

        1. Agco Corporation (NYSE: AGCO)

The AGCO Corporation is a US agricultural machinery manufacturer based in Georgia. founded in 1990, it’s a relatively young company. Despite the good numbers, many analysts believe that AGCO has underperformed in recent years and has far greater potential. This is a stock to watch; the fundamentals are good, and the market for agricultural machinery appears to be robust.  

         2. Deere and Company (NYSE: DE)

John Deere is probably the best-known of our five stocks, DE has been in business since the early 19th century and is a household name - being an iconic US agricultural machinery company.Very few global corporations operate on this scale. John Deere is a market leader in electric agricultural vehicles and the integration of high tech into farm and forestry vehicles, and also runs a profitable financial services segment. If you’re looking for the best agricultural stocks to buy, DE is well worth deeper analysis.

         3. ICL Group Ltd. (NYSE: ICL)

ICL is a leading global specialty minerals company and one of the largest fertilizer manufacturers in the world. ICL’s world-renowned NP/NPK fertilizers and innovative AgTech businesses place it at the heart of the agricultural sector.

ICL is rapidly expanding and building on its already sizable global presence. The company is in the process of constructing a new $400 million US plant and anticipates substantial medium-term returns on its investments. ICL is currently trading close to its 52 week low of 4.30, making it an affordable stock with considerable potential. 

         4. Bunge Global SA (NYSE: BG

Bunge has a global reputation for food processing and grain and soybean trading. It is also active in biofuel production and fertilizers. BG is a solid stock that has broadly trended upward since May 2020. The company’s core business of food staples, backed up by two centuries of expertise, gives Bunge considerable stability. Many analysts feel that BG delivers a good compromise between reliability and profitability. One factor to consider is Bunge’s planned merger with Canadian grain multinational Viterra. 

The Best Agricultural Stocks to Buy - Take Away Points

Any investment in the stock market has inherent risks. When you invest in agricultural stocks, it’s recommended to employ careful fundamental analysis and to be aware of environmental factors that can affect share prices. Nature is no respecter of investment strategies. Natural phenomena can cause major unexpected volatility in the agricultural and commodity markets although sometimes this can work in favor of stock traders. 

  • Be aware of potential natural factors e.g. extreme weather events.
  • Understand the AgTech advances that are transforming the sector.
  • Consider diversifying, even within your narrower portfolio of agricultural stocks.
  • Remember that major companies like ICL and Bayer have AgTech and agricultural divisions. 
  • Be aware of emerging consumer trends that can affect the value of agricultural stocks.

More By This Author:

Why ESG Matters In 2024: What Investors Should Know
Best 4 Agriculture Companies For Your 2024 Investment Portfolio
The Role Of Potash In Feeding The World

Disclosure:  If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.
Seeking Alpha Reader 3 weeks ago Member's comment

Why delete my comment if you have nothing to hide?