This year has been a roller coaster ride for many agriculture stocks. As 2009 began, many companies benefited from the industry's tailwinds that were created by the boom in grain prices. However, prices collapsed and farmers deferred purchases, highlighting that agriculture stocks were not immune to Mr. Market's wrath. As the end of the year approached, however, a revised favorable outlook again helped companies head into December with favorable tailwinds.

IN PICTURES: Great Depression without having to make any capital structure changes. A couple of years from now, the dominance of this industry will prove very valuable. (To learn more about depression and recession, read Recession And Depression: They Aren't So Bad.)

Feeding the Masses
My favorite agriculture sector continues to be fertilizers. Fertilizers have had an excellent year, despite the precipitous decline in fertilizer prices that took hold this year. Dominant fertilizer names like Potash (NYSE:POT) and Agrium (NYSE:AGU) have valuable assets that would take years, billions of dollars and lots of environmental approval to replicate. However, both have delivered in 2009. By December, shares in Potash were up over 60%, while Agrium had increased by nearly 70%. Even the Market Vectors Agribusiness ETF (NYSE:MOO), a great collection of the major agriculture players, is up nearly 60% over the same period.

Looking Forward
The fundamentals of the agriculture industry continue to look very strong over the next several years. What started in 2009 could be the beginning of a very successful run for the quality names in this space.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis article, risk free!

Related Articles
  1. Investing Basics

    What's Current Portion of Long-Term Debt?

    The current portion of long-term debt is the part of a company’s long-term debt that must be repaid within the next year.
  2. Economics

    Explaining Cost Control

    For a business, cost control entails managing and reducing expenses.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares Asia 50

    Read more about BlackRock's iShares Asia 50 Fund, an ETF that follows the four "Asian Tiger'' nations plus China.
  4. Retirement

    What's a 401(a) Plan?

    A 401(a) plan is a type of money-purchase retirement plan set up by an employer.
  5. Investing

    Build a Retirement Portfolio for a Different World

    When it comes to retirement rules of thumb, the financial industry is experiencing new guidelines and the new rules for navigating retirement.
  6. Mutual Funds & ETFs

    ETF Analysis: WisdomTree International LargeCp Div

    Learn more about the WisdomTree International LargeCap Dividend fund, an income-based international equities ETF that focuses heavily on the United Kingdom.
  7. Chart Advisor

    ChartAdvisor for September 4 2015

    Weekly technical summary of the major U.S. indexes.
  8. Investing

    Automating Your 401(k) is Easier Than You Think

    If you like automation, you should check out these features that many 401(k) plans offer.
  9. Economics

    Understanding Free Trade

    Free trade exists when nations can swap goods and services without the constraints of tariffs, duties or quotas.
  10. Investing Basics

    Explaining Delivery Versus Payment

    Delivery versus payment is a common procedure for settling the exchange of securities.
RELATED TERMS
  1. Implied Volatility - IV

    The estimated volatility of a security's price.
  2. Plain Vanilla

    The most basic or standard version of a financial instrument, ...
  3. Operating Cost

    Expenses associated with the maintenance and administration of ...
  4. Trade Credit

    An agreement where a customer can purchase goods on account (without ...
  5. Normal Profit

    An economic condition occurring when the difference between a ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's ...
RELATED FAQS
  1. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  2. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  3. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  4. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
  5. Why are mutual funds not FDIC-insured?

    Mutual funds are not Federal Deposit Insurance Corporation (FDIC)-insured because money invested in funds are not considered ... Read Full Answer >>
  6. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!