Best Agriculture Stocks to Buy in 2024

Agriculture is a life-sustaining operation, and there are numerous ways for investors to own a piece of the action.

Like much of the global economy, the agricultural industry is sensitive to a wide range of global events, including wars, natural disasters, and political turmoil. Given that, the industry has been volatile as the war in Ukraine has, at times, squeezed the supply of products such as wheat and fertilizers.

A number of agriculture exchange-traded funds, such as iShares MSCI Agriculture Producers ETF (VEGI 0.21%), traded around all-time highs shortly after the war in Ukraine broke out, although prices for commodities such as corn, soybeans, and wheat started to pull back by July 2022 due to fears of a recession and falling oil prices. A stronger dollar has also been weighing on agricultural commodities such as fertilizer. Since global commodities are priced in dollars, a strong dollar makes them more expensive in other currencies, bringing down the price.

Agribusiness is big business and touches on a wide array of industries. The scale required for operations has led to market power being concentrated in a handful of titans after a number of mergers and acquisitions. These companies — many with healthy profits, cash flows, and dividends — offer excellent opportunities for investors.

Top agriculture stocks

Top 8 agriculture stocks to invest in 2024

Investors can choose among companies providing agricultural products and services such as fertilizers, pesticides, seeds, processing, and livestock. There are also a handful of emerging markets. As producers of basic foods, many agricultural stocks are considered consumer staples, meaning that demand for their products is not affected by the broader economy.

Here’s a list of eight top dividend-paying agriculture stocks spanning a variety of investment opportunities. They’re great for investors with a long-term mindset.

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1. Archer-Daniels-Midland

Archer-Daniels-Midland (ADM) is a global agricultural giant known for processing and trading products, including food ingredients, animal feeds, and biofuels.

It produces a wide variety of crops, including soybeans, corn, and wheat, and also innovates, having developed or contributed to the development of products like textured vegetable protein, high-fructose corn syrup, ethanol, and Omega-3 fatty acids.

Today, the company is one of the largest in the world by revenue, bringing in $94 billion in 2022. It’s paid dividends for 92 consecutive years, and it’s a Dividend King, having raised its dividend every year for 51 years.

ADM delivered steady profit growth from 2016-22, benefiting from strong demand for crops and biofuel, but profits fell as commodity prices and manufacturing costs rose. A number of market forces have continued to pressure the business in 2024.

Nonetheless, its economies of scale and vertical integration give it a competitive advantage in agriculture, and investors should expect steady growth over the long term as global demand for food and biofuels continues to grow.

2. Bayer

Bayer is a diversified company with products, spanning healthcare, agriculture, and consumer goods. It makes medicines like aspirin, Aleve, and Alka-Seltzer; in agriculture, it’s probably best known as the maker of Roundup, the popular weed killer, which it obtained when it acquired Monsanto for $63 billion in 2018.

It’s one of the world’s largest producers of crop protection products and seeds and a major player in consumer health and pharmaceuticals.

In February 2024, the company slashed its dividend by 95% to free up more cash to pay down its debt burden, leading to a sharp stock slide. Through 2024, the company continued to face a challenging agricultural climate, and volume sales have fallen in areas like crop science and consumer health.

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3. Bunge

Bunge is a diversified agriculture company whose businesses range from oil production to milling to grain and commodity production. It also produces sugar and ethanol.

Like its peers, Bunge’s performance has cooled as commodity prices have come down; 2023 revenue fell 11% to $59.5 billion. In 2023, the company also agreed to acquire Viterra, an integrated Canadian agricultural company with a focus on grains, oilseeds, and cotton.

Bunge’s gross profit margin is in just the single digits since much of its business involves buying commodities and adding value through milling and oil production.

Management faced challenging market conditions in 2024 as prices in its milling business and in commodities like ethanol, refined and specialty oils were down.

4. Scotts Miracle-Gro

Scotts Miracle-Gro is a leader in lawn care products, but unlike most of the companies on this list, it sells to individual consumers rather than to large companies in the food supply chain.

Because of its leading position in lawn care, the company was a big winner in the early stages of the COVID-19 pandemic, but it has struggled in the aftermath of the pandemic. Its Hawthorne unit focused on cannabis has been a sore spot amid a broader downturn in the cannabis sector.

A restructuring strategy has helped streamline the business, and it returned to growth in 2024 with strong margin gains as it shed lower-margin product lines.

While the company is still reinventing itself, it remains the top brand in at-home lawn care, which should drive long-term growth and outperformance.

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5. Corteva Agriscience

Corteva Agriscience was the product of a spin-off of DowDuPont’s agriculture division when it broke up into three companies.

Corteva focuses on crop protection products like herbicides and insecticides, seed products for corn, soybeans, wheat, and other commodities, digital tools and services like planting technology and soil mapping, and soil testing and crop scouting.

The company is coming off a solid 2023 as it grew operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, even as organic sales were down by 3% to $17 billion.

It also benefits from higher seed prices even though crop protection sales suffered from an industry-wide downturn.

The company expects continued growth through 2025, calling for revenue between $19.5 billion and $20.5 billion, up from $17.2 billion in 2023, and operating EBITDA of $4.1 billion, up from $3.4 billion in 2023. If the company can hit those numbers, the stock should be a winner for investors.

6. Nutrien

Nutrien is a leading producer of fertilizer, crop protection products, and seeds. It was formed in 2018 through the merger of Potash Corporation of Saskatchewan and Agrium.

The company is best known for producing potash, nitrogen, and phosphate fertilizers, and it benefited from surging fertilizer prices in 2021 and 2022.

After a surge in 2022, however, revenue fell 23% to $29.1 billion in 2023, while net income plunged 83% to $1.3 billion, showing the business’ exposure to commodity prices.

Nutrien also suffered from a rough 2024 start, with lower fertilizer prices weighing on the business. But the company is still delivering solid profits and remains the low-cost leader in the fertilizer industry, giving it a long-term advantage.

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7. FMC Corp.

FMC is a chemical company that serves the agriculture, food and beverage, and pharmaceutical industries.

In agriculture, it’s best known for helping farmers improve crop yield and quality while limiting environmental impact.

FMC reported a sharp decline in revenue in 2023, down 23% to $4.5 billion, and profits fell faster, with adjusted earnings per share down 49%, showing the leverage in its business model.

In 2024, the company is seeing volume recover, although it’s still experiencing some of the same inventory reduction issues with its customers. Lower prices have also offset volume growth.

Comparisons should get easier in the year’s second half, leading the company back to growth.

8. Tyson Foods

Tyson Foods is one of the world’s largest producers of poultry, pork, and beef, and also produces animal feed for its own livestock and other farmers. It’s vertically integrated into prepared foods as well, selling pizza, toppings, deli meats, and snacks through brands like Ball Park, Aidells, Jimmy Dean, and Hillshire Farm.

After a weak 2023, the company’s results improved in 2024 thanks to a cost-cutting program and a $448 goodwill impairment charge that rolled off its income statement. Meanwhile, volume sales and average prices have been mostly flat.

The company is also targeting a total of $1 billion in productivity savings by the end of fiscal 2024, although the overall business continues to be subject to underlying protein prices.

Although quarter-to-quarter performance in the agriculture industry is volatile, Tyson should benefit from economies of scale and its strong position in higher-margin prepared foods over the long term.

Of course, not all agriculture stocks are created equal. There are unique considerations in each ag-related industry. As you’re assessing which agricultural stocks are right for you, consider how the opportunities and risks align with your investing preferences.

Seven more opportunities

The basics of agribusiness: Seven opportunities to consider

Here’s an overview of seven major opportunities, listed in no particular order:

1. Fertilizers (cash flow and dividends)

The world’s major crop nutrients are nitrogen, phosphorus, and potassium. Nitrogen is manufactured through synthetic chemistry, while potash and phosphate are primarily mined. Major crops such as corn, soybeans, and wheat rely on all three nutrients.

Fertilizer prices soared in 2022 after Russia invaded Ukraine; both countries are major fertilizer producers. However, they came down rapidly in 2023 as the market stabilized.

Nutrien, one of the world’s largest fertilizer producers and the largest potash producer, is on track to generate 26 million metric tons annually. The company also benefits from some of the lowest nitrogen production costs in the industry.

Scotts Miracle-Gro offers exposure to individual consumers such as gardeners and homeowners in need of lawn care products, as well as farmers. The stock did well during the early stages of the COVID-19 pandemic as stay-at-home orders and a general shift to more time spent outdoors sparked an interest in lawn and garden care. Revenue declined sharply as the pandemic ebbed, although it’s since rebounded.

2. Pesticides (cash flow and dividends)

Pesticides have also seen a spike in prices due to supply chain constraints and material shortages. A wave of consolidations in recent years is also reshaping the industry.

Bayer acquired Monsanto in 2018 to become the dominant player in the industry. In a series of transactions from 2018-19, FMC completed the spinoff of its lithium segment, sold its nutrition business, and purchased assets from DuPont to become one of the largest global agrochemical companies. DuPont and Dow Chemical merged and then split into three separate companies in 2019, with one being Corteva Agriscience.

Litigation and regulation remain risks in the sector, however. In February 2021, Bayer set aside $2 billion to cover any further claims against its Roundup weed killer, which has been tied to various cancers. Corteva could also face litigation from its toxic pesticide chlorpyrifos, which the U.S. Environmental Protection Agency banned in 2021 and Corteva pledged to stop using in 2020. A class-action lawsuit in California was filed against the company over the pesticide’s links to brain damage in children. Agricultural groups have also sued the EPA over the ban.

3. Digital agriculture (growth and cash flow)

Advances in data crunching, satellite imagery, and mobile computing power have given rise to digital agriculture. Although this might appear to be a new opportunity, hundreds of millions of acres were covered as of early 2020.

For example, many farmers can now pay a monthly or annual subscription fee for historical and predictive farm-specific data. How many seeds should a farmer place in each row in the northwest corner of their land? When might be the optimal time to apply fertilizer this season? Are corn rootworms likely to be worse than usual?

Deere Co. (DE -0.01%) has emerged as a leader in the category. The technology, paired with its industry-leading farm equipment, has led to a boom in the stock, which has delivered a total return of more than 10,000% since its debut in 1978.

4. Plant-based meats (growth)

Increased demand for animal-free proteins is driving interest in plant-based meat products. To succeed, consumer brands such as Beyond Meat (BYND -1.76%), Impossible Foods, and others need to deliver on nutrition, taste, texture, and price. Companies focused on plant-based products may benefit by creating partnerships and supply agreements with larger agriculture companies such as Archer-Daniels-Midland, Bunge, and Tyson Foods.

A handful of nontraditional stocks also merit consideration. Precision BioSciences (DTIL 0.29%) is developing a novel gene-editing technology platform focused on human health, but it also owns a subsidiary dedicated to agricultural applications. One focus is engineering high-protein, neutral-tasting chickpeas, which could become a next-generation, plant-based protein source. Beyond Meat relies on yellow pea protein for its products, but it might be tempted to switch at least some supply to chickpeas if the Precision product lives up to the hype.

5. Biologicals (growth)

Chemical-based pesticides and fertilizers are poised to dominate their respective markets for the foreseeable future, but investors should know that living technologies are also in production and may see significant growth in the years ahead. Biologicals are microbe-based treatments of soils or crops designed to boost yields, improve defenses against pests, and reduce dependence on chemical inputs.

Individual investors can gain exposure to the emerging opportunity in a few ways. Bayer, FMC, and Corteva are all leading developers of biologicals. From its acquisition of Monsanto, Bayer now has the leading biologicals brand on the market through a partnership with Novozymes (NVZM.Y 0.26%).

6. Vertical farming (growth)

Vertical farming is the latest agricultural technology to sweep the market. Investors are betting big on stocks such as Local Bounti (LOCL 1.47%), a hybrid featuring vertical farming and hydroponics. In vertical farming operations, companies use shelves and artificial light to grow produce, minimizing land and water consumption. By conserving space, vertical farming has the potential to create facilities that are located much closer to consumers than traditional farms.

Local Bounti has fallen short of earlier goals, but the company is still growing. The company counts Cargill as a major investor and partner; the privately owned agriculture giant loaned $200 million to Local Bounti in September 2021 and is considering financing all of its future facilities through 2025.

7. Future markets

There are a number of agribusiness applications on the horizon that investors should watch for in the years ahead.

Flavors and fragrances are high-margin products mostly manufactured through synthetic chemistry, but specialty agriculture has a place in the market as interest increases in items such as natural perfume. Vertical farming also seems to be a good fit here since the amounts of water and land needed are much less than for conventional food production.

Water is a crucial component in agriculture, but it is also a limited resource, and global water consumption is expected to significantly grow over the next generation. Consequently, investors should keep an eye on water treatment and desalination stocks such as Xylem (XYL 1.5%) and Consolidated Water (CWCO 1.16%), which offer exposure to water sustainability.

Related investing topics

Food security still matters in the 21st century

Humans have made tremendous progress in reducing famine and food shortages in the past 70 years, but that doesn’t make food security any less important in the 21st century. A rapidly expanding global middle class and increasing population are likely to raise caloric demand and shift preferences to more protein-heavy foods. Meeting this challenge will require some new technologies, and agricultural companies like those above are hard at work on these projects. Is your portfolio ready to harvest the opportunity?