As the global population increases, the agricultural commodities market will reach $24 trillion by 2025. Over the past two decades, agricultural production has steadily increased to meet the expanding demand. In return, primary crop production has grown by over 50%, meat production by 53%, and milk production by 58% since 2000.

Agriculture Production and Population Growth

The growth in primary crop production underscores how agriculture will always play a massive part in the global economy. For instance, in the U.S., more than 2 million farms contribute over $1.26 trillion to the gross domestic product. The sector also employs millions of people directly and indirectly. Given its importance to the economy, it should come as no surprise that tremendous investment opportunities are up for grabs, given the dozens of companies flexing their muscles in the sector.

The growth in agricultural production has been even faster than the growth in population at 29% due to the increased use of technology. Intensification in farming activities with increased use of irrigation pesticides and fertilizers and enhanced production technologies has enhanced food production.

The ever-growing global population and the consequent rise in food demand necessitate innovative approaches to boost crop yield and enhance farm efficiency. Likewise, there needs to be tremendous investments into the sector if the globe is to be food-sufficient in the coming years.

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As global powers do all they can to ensure food security globally, investment opportunities are increasingly cropping. Food’s being a basic necessity translates to unique investment opportunities that investors can tap into in the broader agricultural production sector.

The investment opportunity will always exist as the world depends on agriculture for healthy, safe, and nutritious food. The ReelShares Agricultural Commodities Fund is one fund that stands out for investors looking to diversify their portfolio by targeting operations in the food production sector.

The ReelShares Agricultural Commodities Fund invests at least 80% of its assets in agricultural commodities companies. Therefore, it is an ideal investment instrument for investors seeking exposure to companies that provide a range of seeds, pesticides, and farm machinery needed to enhance agriculture production. It also invests in fertilizers and crop chemicals companies.

Agriculture Investment Opportunities

Companies that work on innovations that let farmers do more and better offer the best investment opportunities in the agriculture productivity sector. Likewise, investors are always looking for ways to invest in companies that produce high-yielding seeds crucial to enhancing crop production. In addition, there is always a focus on companies that produce new and improved products, such as healthier foods or new chemical or pharmaceutical products that ensure crop protection from farm pests.

The agricultural sector was under immense pressure during the COVID-19 pandemic as global supply chains came under pressure. The lockdown that came not being also affected operations in the industry, rendering it impossible for farmers to optimize their operations

Fast forward, the sector has bounced back with the easing of the pandemic and the opening up of the global economy. The mass movement of people and goods has also seen a significant increase in commodity processes across various categories, triggering unique investment opportunities in the sector. The escalation of the War in Ukraine has also triggered a significant rise in commodity prices, squeezing the supply of wheat and fertilizers.

Fertilizer prices soared in 2021 and are yet to come down amid an increase in raw material costs. The prices have been held high after Russia invaded Ukraine, bringing instability to two of the biggest fertilizer producers. Pesticide prices have also spiked significantly amid supply chain constraints and material shortages.

Agricultural traded funds such as the iShares MSCI Agriculture Producers ETF (VEGI) rallying to all-time highs amid an uptick in commodity prices underscores how investors are pushing for opportunities in the sector.

Similarly, it is turning out to be one of the best times to invest in the agricultural sector amid the push to meet global food demand. By investing in the ReelShares Agricultural fund, investors can gain exposure to companies that provide agricultural products and services such as fertilizers, pesticides, seeds, processing, and livestock.

Some of the best companies for diversifying an investment portfolio are those that process and trade products, including food ingredients, animal feeds, and biofuels. Archer Daniels Midland is one such company that produces various crops, including soybeans, corn, and wheat. It is one of the largest companies in the sector, generating revenues upwards of $100 billion annually.

Bayer is another diversified company with a significant foothold in the agricultural sector best known for producing some of the best crop protection products and seeds. The company generates over $25 billion in revenue from the industry. Corteva Agriscience is another big company developing crop protection products like herbicide and insecticide seed products for corn, soybeans, wheat, and other commodities.

ReelShares Agricultural Commodities Fund

The growing global population, while a good thing for the agricultural industry, continues to strain the ability to use resources to keep up with the output. Research by the Harvard Business Review shows that the human population is projected to reach 10 billion by 2050. The growth is expected to trigger growth in global food demand by as much as 98%

Consequently, agricultural companies are going nowhere soon, given the exponential growth in demand. The upcoming trends also signal that small companies might become giants as demand for food grows. On the other hand, investment opportunities are expected to increase significantly as companies rush to meet the anticipated demand.

One of the reasons to be heavily invested in ReelShares Agricultural Commodities Fund is the ever-constant and steady increase in demand for global food supplies. Following the invasion of Ukraine in 2022, the disruptions of global wheat and corn supplies have become rampant, presenting investment opportunities as food prices remain stubbornly high.

Any investors watching the global commodities environment who want some of the upside potential can do so by investing in the fund. In addition, it is an ideal fund for anyone looking to hedge against future food supply challenges, given its diversified holdings in various sectors of the agricultural field.

The ReelShares Agricultural Commodities Fund invests at least 80% of its assets in agricultural commodities companies. These companies range from those that provide farm machinery, fertilizers, and crop chemicals to those that produce processed food. The fund invests in U.S. domestic and overseas companies. The fund targets an annual return of 30%.

You may purchase fund shares directly from Reel Shares or through a financial intermediary. The shares can be traded openly on the NYSE.

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