Supply disruptions, slowdowns in shipping and rising demand with the reopening of economies are pushing food prices up. So, with this, we think it could be wise to bet on agriculture companies CF Industries (CF) and Intrepid Potash (NYSE:IPI). They are well positioned to benefit in the near-term. Let’s discuss.As COVID-19 pandemic-related restrictions are eliminated, the agriculture industry’s prospects are getting better. The cost of food in the United States increased 2.4% in April 2021, according to the U.S. Bureau of Labor Statistics. Consequently, agriculture stocks are also gaining favor with investors. This is evidenced by the Invesco DB Agriculture Fund’s (DBA) 17.4% gains over the past six months.
One of the key reasons for rising food prices is heavy demand for food commodities from China. Other factors driving food prices include supply disruptions and a slowdown in shipping. Because these factors are expected to continue driving food prices up in the near term, the agriculture industry is expected to continue benefiting. According to a Meticulous Research report, the agricultural micronutrients market is expected to grow at a 8.7% CAGR between 2020 - 2027.
Given this backdrop, we think it could be wise to bet on CF Industries Holdings, Inc. (NYSE:CF) and Intrepid Potash, Inc. (IPI). They are well positioned to capitalize on the agriculture industry’s growth.