Fresh Food Keeps Getting Pricier
YUVARAJ@iamyuvi
−2.2%
since Oct 8
The idea
I believe fresh fruit and vegetables keep getting pricier over the next decade, as heat, drought, and rising farming costs squeeze harvests while fewer farmers work the land. Since the small markets I shop at aren't investable, this basket owns the companies around them instead: those helping farms survive bad weather, those farms pay more to every year for machines and fertilizer, plus big growers who can pass costs on to shoppers. Farmland and a broad farm-business fund add steadiness, with a small cash reserve, all meant to be held for years rather than traded on any one price spike.
What it owns
- Heat and drought make harvests harder to grow, so farms invest in irrigation systems and seed bred to handle stress and protect their yields. · CortevaIt breeds crop seeds designed to withstand heat and drought, helping farmers maintain harvests through increasingly difficult growing conditions., Lindsay CorporationIt manufactures large irrigation systems that farms install to compensate for unreliable rainfall and protect crops during dry periods., Valmont IndustriesIt builds irrigation infrastructure and related systems that farms deploy to protect yields when weather becomes less predictable.21%
- Farms must replenish nutrients every season, and fertilizer makers earn more when crop prices rise and farmers protect their harvests. · NutrienAs the world's largest fertilizer producer, it benefits when farms invest in nutrients to protect yields and crop values rise., CF IndustriesIt produces nitrogen fertilizer that farms apply every year, capturing revenue growth as food costs rise and farmers protect crop yields., The Mosaic CompanyIt mines potash and phosphate nutrients that crops require, capturing value when farms invest more to maintain productivity., ICL GroupIt produces specialty fertilizers used on fruit and vegetable crops, capturing demand when growers invest to protect yields and profitability.21%
- As farm labor grows scarce and expensive, farms shift to buying machinery that replaces workers and raises productivity per person. · Deere & CompanyIt manufactures tractors and farm equipment that help operations compensate for labor scarcity by automating more work., CNH IndustrialIt manufactures New Holland and Case IH tractors and harvesters, helping farms mechanize operations and compensate for farm labor shortages., AGCO CorporationIt makes Fendt and Massey Ferguson equipment sold across Europe and globally, connecting to the farm mechanization trend in major agricultural regions.20%
- Agricultural land becomes more valuable as food costs climb, providing steady appreciation and rising rents over the long term. · VanEck Agribusiness ETFIt holds a diversified portfolio of global agricultural businesses, spreading exposure across many companies that benefit from higher food costs., Gladstone LandIt owns farmland leased to fruit and vegetable growers, and lease payments tend to rise as crop values and farm profitability climb., Farmland PartnersIt leases farmland to operators across the United States, collecting rent that tends to rise as agricultural productivity and crop values increase.16%
- Large fruit and vegetable producers have the scale to raise prices when crops become scarce, protecting margins against rising input costs. · Dole plcIt grows and distributes fruit and vegetables at massive scale, giving it pricing power to pass higher costs to retailers and consumers., Mission ProduceIt supplies avocados and mangoes globally, and as these fresh foods become pricier it gains from sales growth at higher price points., LimoneiraIt grows lemons and avocados in California and owns the underlying land and water rights, benefiting from both pricier fruit and scarcer water.16%
- Cash7%