How to Invest in Agriculture in Australia

1. Incitec Pivot

Market cap: AU$5.69 billion

One of the two biggest fertiliser stocks listed on the ASX, Incitec Pivot (ASX:IPL) has been taking advantage of strong market conditions and increased demand for fertiliser.

In its latest half-year report, the company reported its earnings from its fertiliser business totaled AU$108 million, down 58 percent from its record earning reached in H1 2022 of AU$257 million. The company attributed the decline to much higher gas prices, the impact of East Coast flooding on short term demand, and lower commodity prices. Demand recovery is expected in the second half of 2023.

2. Nufarm 

Market cap: AU$1.93 billion

Nufarm (ASX:NUF) is a Melbourne-based seed and crop technology company serving customers in over 100 countries.

Its products help protect crops against disease, weeds and pests. Nufarm saw a 7 percent growth in earnings in its H2 2023 period ended March 31 over the prior equivalent period. According to Managing Director and CEO Greg Hunt, the company sees a credible path to over AU$4 billion in revenue by 2026.

3. Graincorp

Market cap: AU$1.54 billion

Graincorp (ASX:GNC) is an agribusiness and process company with headquarters in Sydney. The company manages a variety of grains, specifically wheat, barley, canola and sorghum, with handling assets located in Eastern Australia. It serves customers in over 50 countries and is the biggest grain storage business on the east side of the country.

In H1 of its 2023 financial year, Graincorp reported earnings before interest, taxes, depreciation and amortization of AU$383 million. Full year 2023 guidance was upgraded to AU$500 to AU$560 million.

4. Costa Group 

Market cap: AU$1.44 billion

Costa Group (ASX:CGC) has become a significant player in the produce sector since listing on the ASX in 2015. The company focuses on growing, packing and marketing fresh fruits and vegetables. Specifically, Costa produces avocados, bananas, berries, citrus fruits, grapes, mushrooms and tomatoes.

In its 2022 fiscal year, Costa reported more than AU$1.36 billion in earnings, an increase of 11.2 percent over 2021. The company acquired multiple citrus assets in 2021, and since then has increased its development efforts in China. "Costa citrus exports to China more than doubled to circa 10% of volume as a result of our acquisition of 2PH," the report stated.

Thanks to its broad focus on farming, packing and marketing, Costa aims to be diverse enough in its activities to mitigate risks from market volatility and agricultural events.

5. Elders

Market cap: AU$965.46 million

Elders (ASX:ELD) works to increase the productivity of Australian farmers by supplying them with financial and real estate services, along with products such as wool, grain, livestock, seeds, fertilisers, agricultural chemicals and health products for animals.

In its H1 2023 ended March 31, Elders reported revenue of AU$1.66 billion, up 9 percent from a year ago. Thanks to a positive outlook for winter crops, Elders expects strong demand in the second half of the year for agricultural chemicals, fertilisers and seeds. FY 2023 revenues will also benefit from an expected stabilisation in sheep prices and improved cattle volumes.