Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Ag firms outperform S&P 500

18.04.2011
While the general economy has underperformed in the past several years, the crop farming sector has been not just stable, but profitable.

A recent University of Illinois report comparing the returns from publicly traded companies from 2007 until the end of the first quarter of 2011 showed an 8.6 percent market value increase from agriculture-related companies and companies in the S&P 500 experienced a decline of 2.7 percent.

"We looked at 21 agriculture-related midwestern companies in five sectors: fertilizer, equipment, seed and genetic companies, crop production companies, and first processors," said U of I graduate student Clay Kramer who created the index with agricultural economist Gary Schnitkey. "The overall goal was to build an AgIndex that measured the change in market value of publicly traded agricultural companies and compare it to the S&P 500, looking at their market values and how they did over time from 2007 up to the first quarter of 2011."

The S&P 500 is an index that tracks the market values of 500 large companies in the United States. All of the agriculture-related companies that were monitored have an interest in agriculture, but the majority also have interests in other entities, such as construction.

Kramer said that over the course of the study, the AgIndex performed much better than the S&P 500.

"In the first year, we saw a 55 percent increase in ag companies compared with 2.2 percent from those in the S&P 500," Schnitkey said. "Year two was the year of the big stock price decline. The S&P 500 declined 35 percent from the beginning of 2008 to the end of 2008 and the ag market fell even further – 48 percent," Schnitkey said.

The full report is available online at www.farmdoc.illinois.edu under the heading Farm Economics: Facts and Opinions.

Kramer and Schnitkey evaluated the markets using a geometric mean, which is very similar to an average.

"For example, if you invested funds in 2007, this would be your average yearly rate of return," explained Schnitkey. "So 8.6 percent for 2007 through 2010 means you would have had an increase of 8.6 percent in value each year up to 2010."

Among the five agriculture sectors, the first processors didn't perform nearly as well when compared with fertilizer and equipment companies, Kramer said.

"From the beginning of 2007 to the end of 2010, there was a 2 percent decrease in the crop protection sector and a 4 percent decrease in the first processor sector," Kramer said. "These sectors did relatively well in the first quarter of 2011, having increases that caused the second quarter 2011 value to exceed the first quarter 2007 value."

According to the report, market values varied across sectors. Fertilizer, equipment, and seed and genetic sectors had large increases in market values.

"These firms supply products to farmers, who have generally had above-average incomes," Schnitkey said. "Farms having above average incomes likely led to higher demand for fertilizer, equipment, and seed and genetic sectors. The sector that had the lowest market value increase from 2007 was the first processor sector. This sector purchases inputs from grain farms, and higher commodity prices may have played a role in lower market values."

Debra Levey Larson | EurekAlert!
Further information:
http://www.illinois.edu

More articles from Agricultural and Forestry Science:

nachricht Energy crop production on conservation lands may not boost greenhouse gases
13.03.2017 | Penn State

nachricht How nature creates forest diversity
07.03.2017 | International Institute for Applied Systems Analysis (IIASA)

All articles from Agricultural and Forestry Science >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A Challenging European Research Project to Develop New Tiny Microscopes

The Institute of Semiconductor Technology and the Institute of Physical and Theoretical Chemistry, both members of the Laboratory for Emerging Nanometrology (LENA), at Technische Universität Braunschweig are partners in a new European research project entitled ChipScope, which aims to develop a completely new and extremely small optical microscope capable of observing the interior of living cells in real time. A consortium of 7 partners from 5 countries will tackle this issue with very ambitious objectives during a four-year research program.

To demonstrate the usefulness of this new scientific tool, at the end of the project the developed chip-sized microscope will be used to observe in real-time...

Im Focus: Giant Magnetic Fields in the Universe

Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.

The results will be published on March 22 in the journal „Astronomy & Astrophysics“.

Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...

Im Focus: Tracing down linear ubiquitination

Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.

Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...

Im Focus: Perovskite edges can be tuned for optoelectronic performance

Layered 2D material improves efficiency for solar cells and LEDs

In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...

Im Focus: Polymer-coated silicon nanosheets as alternative to graphene: A perfect team for nanoelectronics

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International Land Use Symposium ILUS 2017: Call for Abstracts and Registration open

20.03.2017 | Event News

CONNECT 2017: International congress on connective tissue

14.03.2017 | Event News

ICTM Conference: Turbine Construction between Big Data and Additive Manufacturing

07.03.2017 | Event News

 
Latest News

OLED production facility from a single source

29.03.2017 | Trade Fair News

Transport of molecular motors into cilia

28.03.2017 | Life Sciences

A novel hybrid UAV that may change the way people operate drones

28.03.2017 | Information Technology

VideoLinks
B2B-VideoLinks
More VideoLinks >>>