Agriculture stocks have been in the limelight in recent months. Due to supply chain problems, increasing energy costs, and rising global demand, food prices continue to soar. Moreover, economists suggest that food prices will remain elevated throughout 2022, further fueling inflation. In January, food inflation in the U.S. hit 6.7%, the highest number we have seen since February 1990.
The United States Department of Agriculture’s (USDA) latest farm income report estimates net farm income increased by $23.9 billion in 2021, a 25% year-over-year (YOY) increase. Put another way, tightening global supplies and strong demand from China and Europe has resulted in rising commodity prices. This increase has, in turn, benefited the agriculture sector, driving up revenues.
As a result, agriculture stocks with price-setting power are ideally positioned for a bull market this year. They will benefit from the ongoing inflationary pressures while passing on costs to customers. The ongoing war in Ukraine will also put focus on food supplies worldwide.
The post 7 Agriculture Stocks As Geopolitics Put Focus on Food Supplies originally appeared at InvestorPlace.