Zacks Industry Outlook Highlights Bunge, West Fraser Timber, Hydrofarm and Arcadia Biosciences

In This Article:

For Immediate Release

Chicago, IL – October 24, 2024 – Today, Zacks Equity Research discusses Bunge BG, West Fraser Timber Co. WFG, Hydrofarm HYFM and Arcadia Biosciences RKDA.

Industry: Agriculture Products

Link: https://www.zacks.com/commentary/2355239/4-agriculture---products-stocks-to-watch-despite-industry-concerns

The Zacks Agriculture - Products industry has been bearing the brunt of high input costs, labor shortages and supply-chain headwinds. The decline in commodity prices adds to the concerns. Nevertheless, increasing consumer awareness regarding food ingredients and the preference for healthier alternatives will support the industry. Alternative agricultural technologies like hydroponics and vertical farming are expected to be other key catalysts, given their inherent benefits.

Players like Bunge, West Fraser Timber Co., Hydrofarm and Arcadia Biosciences are poised well to gain from the strong demand in their end markets and ongoing growth initiatives.

About the Industry

The Zacks Agriculture – Products industry comprises companies that are either involved in storing agricultural commodities, distributing ingredients to others, or engaged in farming crops, livestock and poultry products. Some are involved in purchasing, storing, transporting, processing and selling agricultural commodities or products derived from the same. They operate grain elevators, wherein income is generated from commodities bought and sold using these elevators or held as inventory.

Some companies provide nutrients, advanced indoor and greenhouse lighting, environmental control systems, and accessories for hydroponic gardening — the method of growing plants using mineral nutrient solutions in a water solvent instead of soil. A few players offer innovative, plant-based health and wellness products. Companies producing lumber also fall under this industry.

Trends Shaping the Future of the Agriculture - Products Industry

Low Commodity Prices, High Costs Act as Woes: Soybean prices have been down 24.4% year-to-date. Prices are currently below $10 per bushel, the lowest level since late August, as improving crop conditions in Brazil and expectations of a bumper harvest in the United States weighed on prices. Corn has declined 13.1% since the beginning of 2024 to $4.1 per bushel, weighed down by ample supply.

The USDA projects a net farm income of $140 billion for 2024, indicating a decline of 4.4% from that reported in 2023. Net cash farm income is expected to decrease 7.2% to $154.1 billion in 2024. Total crop receipts will decline 10% to $249 billion due to lower receipts for corn and soybeans, as lower prices for both should negate gains from higher sales volumes.