Speaking of the boom in agriculture, such buoyancy hasn’t been limited to commodities and farmlands but almost across the other agricultural spectrum.
For instance agri based equipments have been surging too. Other calls this a pick and shovel or peripheral play.
The Bloomberg observes,
The CHART OF THE DAY compares the shares of two equipment makers, Agco Corp. and CNH Global NV, with the price of corn on the Chicago Board of Trade, which has more than doubled in the past year. This month, the stocks have fallen further than the commodity, which has recouped most of a 10 percent loss.
Demand for farm machinery is rising along with prices, according to a report yesterday by Henry Kirn, a UBS analyst. He based this conclusion on a semiannual survey of U.S. dealers for Agco, CNH and Deere & Co. equipment.
“Dealers are generally optimistic,” Kirn wrote. Seventy- one percent of the survey participants expect sales to increase this year. The percentage is the highest since 2004. Prices for new and used farm machines are generally rising, the report said, and inventories of older gear are below normal levels.
The upswing can also be seen in fertilizer and seed stocks, food processing and many other agri related products.
I will be guilty of representative bias here. The above (stockchart.com) chart shows of some performances of Agri based ETFs and stocks which I think could represent most of the price actions of the industry
The Market Vectors Agribusiness ETF (NYSE:MOO) will give you a broader exposure to the agricultural sector.
Agrium Inc. (NYSE:AGU) A fertilizer producer that sells direct to farmers in the U.S., Argentina, Chile and Uruguay.
Potash (NYSE:POT), the largest fertilizer company in the world
Archer Daniels Midland Company (NYSE:ADM) A food processing company, Archer Daniels takes raw products like corn, wheat and oilseeds and turns them into food and agricultural products.
(my sources here here and here)
Bottom line: The agriculture inflation boom has been broadening.
