While food and agricultural stocks are often overlooked as investments, many companies offering these products represent excellent value for money. Glenneis Kriel asked a number of investment officers about the opportunities available, and what advice they had for would-be investors.
Traditionally, agricultural and food companies have been treated as the stepchildren of the stock market. Today, however, global supply constraints, combined with rising demand for food and technological developments, have turned many of these companies into attractive components of a well-diversified investment portfolio.
According to Andrew Dittberner, chief investment officer at Old Mutual Private Client Securities, annual shareholder returns for listed energy companies and information technology companies since 2004 have averaged 13% and 10% respectively, whereas returns of more than 100 global listed food and agri companies have averaged about 17% a year. The outlook for the sector is also bullish, as its long-term dynamics are supported from both the demand and supply sides.
“Agricultural commodities are essentials used as food, feed and fuel, and the demand for each of these is bound to increase. On the supply side, both arable land and water are becoming scarcer, which in turn will result in an increased demand for livestock feed,” he says.
TOP AGRI STOCK PICKS
Dittberner differentiates between the commodity derivatives market and the equity market. Agricultural producers, users and investors use the commodity derivatives market, such as Safex, to manage their exposure to prices they may receive or pay for commodities.
Investing in agriculture through the equity market, however, gives an investor exposure to the end-business, the value of which is related to the future profitability of the venture.
He identified Atlas Copco, BASF SE, Deere & Co, Ecolab, Mondi, Unilever, Archer Daniels, Tyson Foods, Zoetis and Agco Corp as some of the companies that have performed well in recent times, and singled out Nestlé and AB Inbev as his top picks.
Denne historien er fra 20 July 2018-utgaven av Farmer's Weekly.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Denne historien er fra 20 July 2018-utgaven av Farmer's Weekly.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
New farmers' seedling pitfalls
Inexperienced farmers may be tempted to grow seedlings from seed themselves, but they have much to gain by trusting a seedling grower at a nursery to perform this task for them instead
South African avocado production: a success story
Avocado production in South Africa has expanded markedly since the industry's humble beginnings over 80 years ago. From a small grove planted in 1938 in what was then Nelspruit, the industry has blossomed to seven million trees planted on 20 000ha. Dr Guy Witney, project manager at Great Brak Avos, spoke to Annelie Coleman about the country's avocado production.
Unlocking value through livestock exports
Exporting livestock might sound like a daunting business that's better left for big companies, but Gerrie Ferreira, who farms near Oudtshoorn in the Western Cape, has been doing it successfully for almost 30 years, sometimes in partnership with other breeders. He spoke to Glenneis Kriel about the huge potential this market holds, and offers some advice for farmers who are contemplating going this route.
An agribusiness's dedication to community upliftment
For agribusiness NWK, located in Lichtenburg, North West, corporate social investment is an important part of creating a positive influence alongside financial returns. Johan Bezuidenhout, NWK’s group manager of corporate marketing and communication, spoke to Annelie Coleman about why the company chooses to invest millions of rands in the area it operates in every year.
Empowering dreams, transforming lives
Since its launch in 2013, the Agri's Got Talent competition has revolutionised the lives of many farmworkers by unlocking their hidden talents and fostering a culture of empowerment. Glenneis Kriel spoke to various finalists about how the contest has changed their lives.
Foreign investment: agriculture maintains its appeal
South Africa remains a popular destination for foreign investors, despite an often negative outlook from its citizens. It is a gateway to Africa, and with its counterseasonal production to the Northern Hemisphere and favourable weather, local agriculture is especially well placed to attract foreign interest, bringing with it hope for rural communities
The real value and message of COP29 for SA agriculture
While the 2024 Conference of the Parties may have disappointed those who hoped for real progress, it's more important for South African agriculture to highlight its role in carbon mitigation
Improving efficiencies in feed and grain milling
Bühler, a Swiss-based company that provides solutions and equipment for various industries, including food and animal feed processing, has pledged that by 2025, it will deliver scalable solutions that will reduce energy, waste and water by 50% in the value chains of its customers.
Tips for better olive production
At an SA Olive Association field day in November, industry experts shared ways to improve olive production efficiencies, from soil preparation to harvesting.
More effort needed to protect vulnerable cheetah
On International Cheetah Day, commemorated every year on 4 December, emphasis was placed on the vulnerability of the species.
