Farmers rely on supplied products and various pieces of equipment in order to raise their crops. Farm suppliers include those who make farming equipment, pesticides, fertilizer, and seeds. During times when agriculture is booming, these suppliers benefit as a result of increased demand from farmers. Investing in farm suppliers is one way to benefit from the success of agribusiness.
Farmers must properly prepare their land before they plant crops and they need to harvest these crops once the growth is mature. They rely on farming equipment and machinery to perform these tasks. The largest farming equipment manufacturers are based in the U.S., but non-domestic competition is increasing. Farming equipment manufacturers include big names like Caterpillar Inc., Deere & Company (John Deere), AGCO, and CNH Global.
Seeds are essential to planting crops, but they cannot be just any type of seed. They must be seeds that are bioengineered to resist disease and harsh climates. Bioengineered seeds improve the quality and yield of crops. Fertilizers, herbicides, and other chemicals assist with growth and control weeds, pests, and insects. China Agritech, China Agri-Business, Inc., and China Green Agriculture are publicly traded fertilizer manufacturers based in China. Potash is the world’s largest capacity integrated fertilizer supplier and Hanfeng Evergreen Inc. provides controlled and slow release fertilizers.
Monsanto, an agricultural chemical and seed company, has been a hot stock over the past few years. Other public seed and chemical companies include Mosaic, Agrium, CF Industries, and EI DuPont de Nemours. Syngenta is a Swiss-based company that has $25 billion market capitalization, making it worth a look.
These are the most major players in the farm supply industry and there are other smaller companies worth researching. Investing in farm equipment and machinery companies as well as those that produce seeds, fertilizers, and crop chemicals are ways to get involved in the agricultural industry. As the world’s population grows, so does the demand on its food supply, making investments in farm suppliers worthwhile.
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