Agriculture shares: Popular companies to invest in

Investing in agriculture might not be the first thing that comes to mind, but it plays a vital role in our everyday lives.

It’s the industry responsible for the food on our tables, whether crops or livestock. Investing in agriculture doesn’t necessarily mean investing in actual farms. There are various aspects of the farming industry to consider, such as manufacturing companies that produce the necessary materials, equipment providers, and even the farming companies themselves.

However, it’s important to understand the risks involved, including the unpredictable British weather, which can significantly impact profits. If you’re interested in owning a piece of American farmland, you’re in good company! Bill Gates, the billionaire founder of Microsoft, has invested heavily in farmland. Fortunately, you don’t have to navigate the complexities of direct ownership.

Below, we’ll give you 3 stocks you can buy to get a slice of the action. So, put on your Wellington boots and join us as we plough through the risks and rewards of investing in agricultural stocks!

UK agriculture stocks

If you want to invest in agriculture stocks a little closer to home, there are some UK agriculture stocks that you can invest in, such as:

• Wynnstay Group
• Scotts Miracle-Gro
• Total Produce

Investing in global agriculture stocks from the UK

We’ve listed some examples of agriculture stocks with more information about them, and you can see an A-Z list below if you’ve got any in mind.

AppHarvest (APPH.US)

App Harvest is a farming company that’s built some of the world’s largest indoor farms in Appalachia. It’s a mix of agriculture and technology to improve access to nutritious food and sustainable farming.

Compare brokers to buy AppHarvest shares

Scotts Miracle-Gro (SMG.US)

Scotts Miracle-Gro manufactures and sells lawn, garden and pest control products. Scotts Miracle-Gro owns 27 brands worldwide.

Compare brokers to buy Scotts Miracle-Gro
shares

Dole (DOLE.US)

Dole is a world-leading fresh produce provider. It operates in 30 countries worldwide and grows, sources and packs 300 lines of fresh produce. In July 2021, Dole joined forces with Total Produce to create Dole plc.

Compare brokers to buy Dole shares

How to invest in agriculture stocks

1. Choose stocks to invest in. You can check out some agriculture stocks above and find out more about them.
2. Choose an investment platform. You’ll need one that lets you invest in the stock exchange that your chosen stocks are listed on.
3. Sign up and fund your account. You might need to wait for your account to be verified and for your funds to hit the account before you can begin.
4. Find your chosen stock. You can search by name or ticker.
5. Review and buy. It’s as easy as that!

Why invest in agriculture stocks?

Agriculture stocks can be rewarding — you’re helping companies put food on the table, which means you can feel responsible for bringing home the bacon. There are also loads of different angles that you can invest in.

Agriculture stocks can have dry spells, so you can’t expect your investments to grow consistently all of the time. Check out some of the risks involved when you invest in agriculture stocks before you count your chickens.

The risks of agriculture stocks

Investing in agriculture isn’t all cash crops. There are risks involved.

For example, crops could become damaged if exposed to disease, fire or pests. The weather could reduce the yields, which can be unpredictable here in the UK.

You can protect yourself from these risks in some ways, such as by diversifying your portfolio geographically and by commodity.

Bottom line

Agriculture stocks offer a unique opportunity to diversify your portfolio and contribute to the vital industry that puts food on our tables. With various angles to invest in, it allows you to support companies responsible for feeding the world.

However, it’s important to be aware of the risks involved when investing in agriculture stocks. Crop damage from disease, fire or pests can affect yields, and unpredictable weather, particularly in the UK, can impact agricultural productivity. To mitigate these risks, consider diversifying your portfolio geographically and by commodity. Investing in agriculture stocks across different regions and crops can help balance the potential negative impacts of localised issues.

Additionally, it’s worth noting that the global landscape of agriculture is influenced by factors such as the decreasing availability of farmland, changes in agricultural productivity and geopolitical events like the Russian war in Ukraine.

Frequently asked questions

• Why has billionaire Bill Gates bought up so much farmland?

  Microsoft founder Bill Gates reportedly owns 270,000 acres of US farmland, around two-thirds of the surface area of Greater London!
  
  It makes sense when you consider farmland prices are negatively correlated with stocks. If the stock market crashes, farmland prices might go up, helping to balance things out.
  
  This exposure to agricultural land is a great diversifier for Gates’ humongous portfolio.

• Why has the supply of farmland been falling?

  Over the last 6 decades, the amount of arable land per person has halved. People pushing agricultural-related investment products might try to convince you that this is a slam-dunk case for the asset class. It’s true that urbanisation globally has led to farmland being subsumed by houses, schools and hospitals.
  
  Remember, though, that improved farming methods and the widespread use of fertilisers and pesticides have simultaneously improved productivity. Nowadays, more food can be produced from the same amount of land. In short, the fact there’s less farmland and more people doesn’t mean we are all going to starve!

• What does Russia's war in Ukraine mean for agricultural markets?

  The Russian invasion of Ukraine in 2022 disrupted Ukrainian grain exports for several months, causing massive price run-ups, particularly in wheat, barley and vegetable oil markets.
  
  However, an agreement brokered by the United Nations and Turkey opened a safe maritime humanitarian corridor in the Black Sea, allowing grain shipments to resume from Ukrainian ports.
  
  This has helped address the global food security crisis and contributed to lower grain prices. However, it’s important to note that the situation could change very quickly – for better or worse.

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