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The Zacks Agriculture – Operations industry stands to gain from ongoing innovation and the growing demand for health-focused products. As consumers increasingly prioritize healthy eating, alternative protein consumption is projected to climb. Growth is also being fueled by investments in acquisitions, joint ventures, and expansion initiatives. Advancements in food processing technologies, improved grain-handling methods, expanded storage capacity, and robust demand from emerging markets are supporting industry momentum.

In this favorable environment, companies such as Corteva (CTVA - Free Report), Dole (DOLE - Free Report), Adecoagro (AGRO - Free Report), and Mission Produce (AVO - Free Report) appear well-positioned to capitalize on these trends.

However, the industry faces challenges, such as fluctuating commodity prices, rising input costs, trade uncertainties, and growing operational expenses. These pressures affect productivity, profitability, and long-term sustainability, posing hurdles for industry participants.

About the Industry

The Zacks Agriculture – Operations industry comprises companies that produce or procure, transport, store, process, and distribute agricultural commodities to consumers. It also distributes ingredients to other parts of the agriculture industry (including clothing, animal feed, energy, and industrial products). Some industry players engage in dairy operations, land transformation activities, and the development of food ingredients using gene-editing technology.

The industry encompasses production activities related to the traditional farming of crops (like corn, soybean, wheat, and cotton), and livestock and poultry products (including meat, dairy, and eggs). The products are mainly sold at grocery stores or exported overseas. These are also used as feedstock for other industries. For example, cotton is used in the clothing industry and corn is used in the ethanol industry.

Factors Shaping the Future of Agriculture - Operations Industry

Agricultural Export/Import Projections: The U.S. Department of Agriculture projects agricultural exports of $170.5 billion for fiscal 2025 (ending Sept. 30, 2025), up $500 million from the November forecast. The uptick is primarily driven by stronger grain and feed exports, partially offset by a weaker outlook for oilseeds. Grain and feed exports are expected to be $37.7 billion, up $1.2 billion due to a $1.4-billion increase in corn exports, supported by higher volumes and prices.

In contrast, oilseed and product exports are forecast to decline to $32.4 billion, which moved down $1.1 billion from the previous estimate due to lower soybean prices amid intensified competition from South America. Meanwhile, U.S. agricultural imports for fiscal 2025 are projected at $219.5 billion, reflecting a $4-billion rise from the November outlook. This increase is primarily driven by higher import values of horticultural goods, sugar, and tropical products.

Organic Products & Innovation in Focus: The industry has gained from rising consumer demand for healthier food, prompting a shift toward organic farming practices, and reduced use of chemicals and pesticides. Innovations in food processing, enhanced grain-handling techniques, increased storage capacity, and strong demand from emerging markets are driving growth.

As healthy eating trends expand, alternative protein consumption is expected to rise. To align with trends in food security, health, and well-being, industry players are prioritizing productivity and innovation. Companies are also investing in acquisitions and joint ventures to create high-quality ingredients and solutions that meet the growing demand for healthy products.

Elevated Costs: Agricultural companies face rising costs due to fluctuating commodity prices, inflation-driven input increases, and trade uncertainties, all of which are squeezing profitability. Inflation-driven surges in input costs are significant challenges, raising production expenses and narrowing margins.

To combat these pressures, companies have adopted pricing strategies and improved supply-chain resilience through partnerships and distribution initiatives. However, commodity cost inflation is expected to persist, maintaining pressure on margins in the near-term.

Additionally, companies are managing higher SG&A expenses, driven by performance-related compensation, project costs, and technology investments to stay competitive. These elevated operating expenses and ongoing SG&A deleverage may continue to weigh on profitability.

The Zacks Industry Rank Indicates Bright Prospects

The Zacks Agriculture – Operations industry is within the broader Zacks Consumer Staples sector. The industry carries a Zacks Industry Rank #88, which places it in the top 36% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries resulted from a positive aggregate earnings outlook for the constituent companies. Looking at the aggregate earnings estimate revisions, analysts are gradually gaining confidence in this group’s earnings growth potential.

Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and valuation picture.

The Industry vs. the Broader Market

In a year, the Zacks Agriculture – Operations industry has underperformed the Zacks Consumer Staples sector and the S&P 500.

The stocks in the industry have collectively fallen 12.2% in a year against growth of 4.3% for the sector and 7% for the Zacks S&P 500 composite.

One-Year Price Performance

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The Agriculture - Operations Industry's Valuation

On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing Consumer Staples stocks, the agriculture – Operations industry has recently been trading at 13.34X compared with the S&P 500’s 20.05X and the sector’s 17.18X.

Over the last five years, the industry traded as high as 17.3X, as low as 10.91X, and with a median of 14.21X, as the chart below shows.

Price-to-Earnings Ratio (Past Five Years)

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4 Agriculture Operations Stocks to Keep an Eye on

None of the stocks in the Zacks Agriculture – Operations universe currently sport a Zacks Rank #1 (Strong Buy) rating, yet one stock boasts a Zacks Rank #2 (Buy) rating. Additionally, three of the stock discussed maintain a Zacks Rank #3 (Hold) rating.

Mission Produce

This Oxnard, CA-based company is engaged in the sourcing, farming, packaging, marketing, and distribution of avocados, mangoes, and blueberries to food retailers, distributors, and foodservice customers in the United States and internationally.

By effectively integrating its sales operations with sourcing teams, the company has demonstrated an exceptional ability to meet customer demand while optimizing per-unit margins. This alignment allows Mission Produce to leverage a sustained higher pricing environment, ensuring profitability and consistent performance in its Marketing and Distribution segment.

The Zacks Consensus Estimate for Mission Produce’s fiscal 2025 earnings has moved up 19% in the past 30 days. The Zacks Consensus Estimate for its fiscal 2025 sales and earnings suggests declines of 6.6% and 32.4%, respectively, from the year-ago period’s reported figures. The Zacks Rank #2 (Buy) rated company has delivered a significant earnings surprise, on average, in the trailing four quarters. The stock has declined 14% in the past year.

Price and Consensus: Mission Produce

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Corteva

This Wilmington, DE-based pure-play agriculture company is poised to drive above-market growth through its industry-leading product pipeline and its rigorous approach to innovation and operating discipline. It is poised to accelerate its pace of innovation and existing leadership position in the high-value sector to meet the increasing market demand for naturally derived products through three new collaboration agreements. Strong price execution in seed, supply-chain flexibility, and solid market demand for its balanced and differentiated new product portfolios drive the stock's performance.

The Zacks Consensus Estimate for Corteva’s 2025 earnings has been unchanged in the past 30 days. The Zacks Consensus Estimate for its 2025 sales and earnings suggests growth of 1.7% and 15.2%, respectively, from the year-ago period’s reported figures. The Zacks Rank #3 (Hold) rated company has delivered a negative earnings surprise of 11.5%, on average, in the trailing four quarters. The stock has risen 7.7% in the past year.

Price and Consensus: Corteva

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Dole

This Dublin, Ireland-based global leader in fresh produce is poised to benefit from improved logistical efficiencies in several areas, which brought increased stability to its core fruit business. The company’s diverse sourcing network and advanced farming practices are likely to help overcome the weather challenges in various regions. Dole benefited from a healthier supply and demand balance, which allowed for a better pricing environment in Europe and much-improved selling conditions in the non-core markets.

The Zacks Consensus Estimate for Dole’s 2025 earnings has been unchanged in the past 30 days. The Zacks Consensus Estimate for its 2025 earnings suggests growth of 4.7% from the year-ago period’s reported figure. The Zacks Rank #3 (Hold) rated company delivered an earnings surprise of 38.3%, on average, in the trailing four quarters. The stock has rallied 15% in the past year.

Price and Consensus: Dole

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Adecoagro

This Luxembourg-based agriculture industrial company engages in farming crops and other agricultural products, dairy operations, sugar, ethanol and energy production, and land transformation activities in South America. Adecoagro benefits from high asset flexibility, which gives it a competitive advantage in the current uncertain market outlook.

Its flexibility is reflected in its ability to increase the mix of anhydrous ethanol to benefit from its high prices and recovering demand. The company’s Farming and Land Transformation businesses have been benefiting from consolidating the five-year plan investments made in crops, rice, and dairy businesses, along with its focus on efficiencies.

The Zacks Rank #3 (Hold) rated company’s shares have declined 0.3% in the past year. The Zacks Consensus Estimate for the company's 2025 earnings has been unchanged in the past 30 days. The Zacks Consensus Estimate for the company’s 2025 sales and EPS suggests declines of 3.2% and 41.1%, respectively, from the year-ago period’s reported figures.

Price and Consensus: Adecoagro

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