The Zacks Agriculture – Products industry is forecasted to expand due to steady food demand driven by a rising global population and increasing consumer awareness regarding healthy food options. This sector also stands to benefit from innovations such as hydroponics and vertical farming. Companies like Bunge Global S.A. (BG) and GrowGeneration (GRWG) are well-positioned to capitalize on these trends.
The U.S. Department of Agriculture (USDA) projects total production expenses will rise by 1% to $477.7 billion by 2026, with livestock and poultry purchases, feed, and labor being the largest expense categories. While livestock spending is expected to climb by 9.7%, feed costs are projected to decline by 6.8%. Overall, the Agriculture – Products industry has outperformed the S&P 500, increasing by 40.6% over the past year compared to the S&P 500’s 26.7% gain.
Currently, the Agriculture – Products industry operates at a trailing EV/EBITDA ratio of 8.76 compared to the S&P 500’s 18.40, indicating potential valuation attractiveness. Notable players in this space, like Bunge, expect earnings to rise significantly, while GrowGeneration shows signs of financial improvements aiming for profitability within the near term.
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