The agriculture industry is crucial in Canada’s economy, contributing billions of dollars annually. Investing in agriculture stocks could be wise with the increasing demand for food and the need for sustainable agriculture practices.
But with so many options available, it can be overwhelming to determine which agriculture stocks are worth investing in. That’s why I’ve compiled a list of the top agriculture stocks in Canada to help guide your investment decisions.
In this article, I’ll discuss the top agriculture stocks in Canada, their performance, and their growth potential. Whether you’re a seasoned investor or just starting, this guide will provide valuable insights to help you make informed investment decisions in agriculture.
Why Invest in Agriculture in Canada?
Investing in agriculture in Canada can be attractive for several reasons:
Stable Political and Economic Environment – Canada has a stable political and economic environment, which provides a predictable and supportive investment climate. In addition, the country has a well-established legal system and strong regulatory frameworks that protect investors’ rights and interests.
Abundant Natural Resources – Canada is rich in natural resources, including fertile land, abundant water, and favourable climatic conditions. These resources provide a conducive environment for agricultural production, making Canada a leading producer of several agricultural commodities.
Increasing Global Demand – The global demand for food is increasing due to population growth and changing dietary habits. Canada’s agricultural sector is well-positioned to benefit from this trend, as it is a significant producer and exporter of several food commodities, such as wheat, canola, and beef.
Technological Advancements – The Canadian agricultural industry is characterized by innovation and modern technologies to improve efficiency and productivity. This innovation has led to the development of new crop varieties, precision agriculture, and sustainable practices, which can enhance yields and reduce costs.
Favourable Government Policies – The Canadian government has implemented several policies to support the agricultural industry, including subsidies, research funding, and trade agreements. These policies have created an enabling environment for agricultural production and exports, which can benefit investors.
The Best Agriculture Stocks in Canada
Nutrien Ltd (NTR.TO)
Nutrien is a global crop inputs, services, and solutions provider and the world’s largest agricultural input company. Nutrien is headquartered in Saskatchewan, Canada, and is significant in Canada’s agricultural industry. Its diverse product portfolio includes fertilizer, crop protection products, and seeds. It could be a good investment due to its strong market position, diversified product portfolio, and global reach.
SunOpta (TSX: SOY.TO)
SunOpta Inc. (TSE: SOY) is a Canadian company that produces and processes organic and non-genetically modified (non-GMO) food products. The company operates in two segments: SunOpta Food Group and Opta Minerals Group.
The SunOpta Food Group produces a range of organic and non-GMO food products, including frozen fruits and vegetables, beverages, plant-based proteins, and snacks. The company’s products are sold to retail, food service, and industrial customers in North America, Europe, and Asia.
SunOpta is well-positioned to benefit from the growing demand for organic and non-GMO food products and the increasing interest in plant-based proteins. The company’s focus on sustainability and healthy food choices also aligns with changing consumer preferences, which could make it a promising investment for those interested in the food industry.
AG Growth International Inc. (AFN.TO)
AG Growth International is a Canadian-based manufacturer of grain handling and storage equipment. Its products store, handle, and condition grains, oilseeds, and other agricultural commodities. It could be a good investment due to its strong market position, focus on efficiency and sustainability, and exposure to the global agricultural industry.
The Green Organic Dutchman Holdings Ltd. (TGOD.CN)
The Green Organic Dutchman is a Canadian-based producer of premium organic cannabis products on the CSE. While not directly related to traditional agriculture, the company’s focus on organic production and sustainable practices could appeal to investors looking for exposure to environmentally conscious companies. It could be a good investment due to its innovative approach to agriculture and potential for growth in the cannabis industry.
Burcon NutraScience Corporation (BU.TO)
Burcon NutraScience Corporation (BU.TO) is a Canadian company that develops and produces plant-based proteins. The company’s proprietary technology allows for extracting and purifying proteins from various plant sources, including canola, soy, and pea.
Burcon’s flagship product is Peazazz, a pea protein isolate that is highly soluble, neutral in taste, and has a high protein content. The company also produces Supertein, a canola protein isolate high in protein and has a complete amino acid profile.
Organto Foods Inc. (OGO.V)
Organto Foods is a Canadian-based producer and distributor of organic fruits and vegetables. Its products are sourced worldwide and sold through various grocery stores and e-commerce platforms. It could be a good investment due to its focus on organic production, sustainability, and the potential for growth in the organic foods market.
Village Farms International, Inc. (Nasdaq: VFF)
Originally from Delta, BC, Village Farms is a Canadian-based producer of greenhouse-grown fruits and vegetables. Its products are sold through various channels, including grocery stores and e-commerce platforms. It could be a good investment due to its focus on sustainable production practices, the potential for growth in the organic foods market, and exposure to the global agricultural industry.
Agrium Inc. (NYSE: AGU)
Agrium is a leading provider of crop nutrients, crop protection products, and seeds in Canada. It has a broad portfolio of products and services catering to Canadian farmers’ needs. Agrium also has a strong presence in the United States and Australia. Therefore, it could be a good investment due to its strong market position, diversified product portfolio, and international presence.
Bunge Limited (NYSE: BG)
Bunge is a leading global agribusiness and food company in Canada and several other countries. It produces, processes, and sells agricultural commodities, including grains, oilseeds, and sugar. Therefore, it could be a good investment due to its diversified business model, global reach, and focus on sustainable agriculture.
Richardson International Limited (private)
Richardson International is now a private Canadian agribusiness specializing in grain, oilseed, and food processing. It is one of the largest processors and exporters of grains in Canada and has a significant presence in the global market. It could be a good investment due to its strong market position, global reach, and focus on value-added products.
SSC Security Services Corp. (SECU.V) (formerly Input Capital Corp. – INP.V)
Input Capital, which changed its services and name to SSC Security Services Corp., was formerly a Canadian-based agricultural commodity streaming company that provided capital to farmers in exchange for a portion of their crop production. This was a novel idea in the agriculture business.
Its unique business model allows it to generate revenue from the sale of agricultural commodities without actually owning any physical assets. Therefore, it could be a good investment due to its innovative business model and exposure to the Canadian agricultural industry.
What About Agriculture ETFs?
The iShares S&P/TSX Global Agriculture Index ETF (COW.TO) is a top agriculture ETF with Canadian exposure. The ETF seeks to track the performance of the S&P/TSX Global Agriculture Index, which includes companies engaged in agriculture and farming-related activities from around the world, including Canada.
The ETF has a significant allocation to Canadian companies, with over 30% of its holdings in Canadian stocks. Some Canadian companies included in the ETF’s holdings are Nutrien Ltd., Agrium Inc., and Bunge Ltd.
Trends in Agriculture Company Innovation
A strong culture of innovation characterizes Canada’s agricultural sector, and there are several latest trends in agriculture innovation in Canada. Some of these trends include:
Precision agriculture is a data-driven approach to farming that uses technology such as sensors, drones, and GPS to optimize yields, reduce costs, and minimize environmental impact. Canadian farmers increasingly adopt precision agriculture techniques to improve their operations and gain a competitive advantage.
Vertical farming is also a trend in agriculture innovation in Canada. Vertical farming is a form of indoor agriculture that involves growing crops vertically stacked layers, using artificial lighting, controlled temperature, and hydroponic or aeroponic systems. This approach to farming offers several advantages, mainly the efficient use of space.
Artificial intelligence (AI) is used in various aspects of agriculture, from crop monitoring and yield prediction to disease detection and supply chain optimization. Canadian agtech companies are developing AI-powered tools and platforms to help farmers make data-driven decisions and improve efficiency.
Sustainability is a growing trend in agriculture, focusing on reducing waste, conserving resources, and minimizing environmental impact. Canadian farmers are adopting sustainable practices such as reduced tillage, cover cropping, and organic farming to improve soil health, reduce greenhouse gas emissions, and increase biodiversity.
The demand for plant-based proteins is increasing globally, and Canadian agtech companies are developing new crop varieties and processing technologies to meet this demand. For example, companies are developing crops such as lentils, peas, and hemp that are high in protein and can be used as ingredients in plant-based food products.
Blockchain technology is used in agriculture to improve supply chain transparency, traceability, and food safety. Canadian agtech companies are developing blockchain-based platforms that allow farmers, processors, and retailers to track products from farm to fork, improving trust and accountability in the food system.
Sub-Sectors of Canadian Agriculture
Canada’s agricultural sector is diverse and comprises several sub-sectors. Some of the most notable sub-sectors of agriculture in Canada include:
Grains and Oilseeds
Canada is a significant producer and exporter of grains and oilseeds, including wheat, canola, barley, and oats. These crops are primarily used for food, feed, and industrial purposes and are an essential source of income for Canadian farmers.
Livestock and Meat
The livestock and meat industry is another significant sub-sector of Canadian agriculture, with cattle, hogs, and poultry being the primary livestock raised. Canada is a major exporter of beef and pork, with these products being shipped to markets worldwide.
The dairy industry is integral to Canadian agriculture, with milk being produced on over 10,000 farms nationwide. Also, dairy products such as milk, cheese, and yogurt are staples in the Canadian diet and are exported to global markets.
Horticulture refers to the cultivation of fruits, vegetables, and ornamental plants. This sub-sector of agriculture is diverse and includes a range of crops such as apples, strawberries, potatoes, and greenhouse vegetables. Canada’s horticulture industry is known for its high quality and innovation.
Agri-food processing involves converting raw agricultural products into value-added food and beverage products. Canada has a strong agri-food processing industry, with companies processing meat, dairy, grains, and fruits and vegetables.
Will You Invest in Agriculture Company Stocks in Canada?
In conclusion, investing in agriculture stocks in Canada can offer investors exposure to a sector that has historically demonstrated resilience and stability while presenting the potential for growth and innovation.
The Canadian agriculture industry has a solid global reputation for producing high-quality, sustainably-grown products. It has continued to invest in new technologies and processes to increase productivity and efficiency.
Additionally, changing consumer preferences towards healthy, sustainable and plant-based diets and increasing demand for food and agricultural products provide potential growth opportunities for agriculture stocks in Canada.