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 Kakao in Monokultur verträgt Trockenheit besser als Kakao in Mischsystemen
18.09.2017 | Georg-August-Universität Göttingen

nachricht Ultrasound sensors make forage harvesters more reliable
28.08.2017 | Fraunhofer-Institut für Zerstörungsfreie Prüfverfahren IZFP

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: The pyrenoid is a carbon-fixing liquid droplet

Plants and algae use the enzyme Rubisco to fix carbon dioxide, removing it from the atmosphere and converting it into biomass. Algae have figured out a way to increase the efficiency of carbon fixation. They gather most of their Rubisco into a ball-shaped microcompartment called the pyrenoid, which they flood with a high local concentration of carbon dioxide. A team of scientists at Princeton University, the Carnegie Institution for Science, Stanford University and the Max Plank Institute of Biochemistry have unravelled the mysteries of how the pyrenoid is assembled. These insights can help to engineer crops that remove more carbon dioxide from the atmosphere while producing more food.

A warming planet

Im Focus: Highly precise wiring in the Cerebral Cortex

Our brains house extremely complex neuronal circuits, whose detailed structures are still largely unknown. This is especially true for the so-called cerebral cortex of mammals, where among other things vision, thoughts or spatial orientation are being computed. Here the rules by which nerve cells are connected to each other are only partly understood. A team of scientists around Moritz Helmstaedter at the Frankfiurt Max Planck Institute for Brain Research and Helene Schmidt (Humboldt University in Berlin) have now discovered a surprisingly precise nerve cell connectivity pattern in the part of the cerebral cortex that is responsible for orienting the individual animal or human in space.

The researchers report online in Nature (Schmidt et al., 2017. Axonal synapse sorting in medial entorhinal cortex, DOI: 10.1038/nature24005) that synapses in...

Im Focus: Tiny lasers from a gallery of whispers

New technique promises tunable laser devices

Whispering gallery mode (WGM) resonators are used to make tiny micro-lasers, sensors, switches, routers and other devices. These tiny structures rely on a...

Im Focus: Ultrafast snapshots of relaxing electrons in solids

Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!

When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...

Im Focus: Quantum Sensors Decipher Magnetic Ordering in a New Semiconducting Material

For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.

Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

I-ESA 2018 – Call for Papers

12.09.2017 | Event News

EMBO at Basel Life, a new conference on current and emerging life science research

06.09.2017 | Event News

 
Latest News

Rainbow colors reveal cell history: Uncovering β-cell heterogeneity

22.09.2017 | Life Sciences

Penn first in world to treat patient with new radiation technology

22.09.2017 | Medical Engineering

Calculating quietness

22.09.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>