Buy These 2 Agriculture Stocks As Food Prices Continue To Soar

aerial photography of green fields

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World food prices rose for the eighth consecutive month in January. The FAO Food Price Index averaged 113.3 points in January 2021, registering its highest monthly average since July 2014. With crop supplies dwindling and the side effects of COVID-19 pandemic-related monetary policy easing, farm commodity prices are likely to continue rising in the coming months.

Consequently, the agricultural sector has been garnering a lot of investor attention lately. Thanks to a combination of increased demand from areas experiencing an economic recovery, a weaker dollar, poor weather and disrupted global supply chains, the optimism surrounding food prices is not likely to diminish anytime soon.

This, we think, should bode well for  Archer-Daniels-Midland Company (ADM - Get Rating) and Nutrien Ltd. (NTR - Get Rating), which deliver agricultural products. With crop prices on the upswing, these stocks should generate substantial returns in the near term.

Archer-Daniels-Midland Company (ADM - Get Rating)

Headquartered in Chicago, Illinois, ADM procures, processes, and merchandises agricultural commodities, products, and ingredients in the United States and internationally. It operates through Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition segments and is also engaged in the agricultural commodity and feed product import, export, and distribution.

In  December,  ADM announced that it will end production of dry lysine in the first half of this year to focus solely on meeting customer needs for liquid and encapsulated lysine products. The company’s investment in cutting-edge ingredients and services should help it strengthen its business portfolio significantly.

In November, ADM  announced plans to collaborate with InnovaFeed on the construction and operation of the world’s largest insect protein production site in Decatur, Illinois. This project should help ADM meet the fast-growing demand for insect feed in the U.S. and worldwide and take the next steps to innovate and grow its business.

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