Crop and trade forecasts issued by the U.S. Agriculture Department look promising, which has led many to expect a slow and steady recovery in the agricultural sector, reports Angie Pointer for The Wall Street Journal.
- The USDA has projected that farm income will rise nearly 12% to $63 billion in 2010.
- Food inflation is below 2007-2008 levels, but that’s expected to end this year as prices for meat, milk and other commodities see price increases. [Oil and Gas Plays for Rising Energy Prices.]
- It expects a 9% increase in U.S. beef exports and a 9% rise in pork exports.
- Land planted to cotton is estimated to surge 15%, with U.S. cotton exports expected to increase by 5%, and global cotton consumption could expand by 2.6% this year, according to the USDA.
- The livestock sector could be a driver for economic and jobs growth if the farm economy benefits from the broader economic recovery. [Metals ETFs Are Leading the Charge.]
There are a variety of ETFs and exchange traded notes (ETNs) that can get you exposure to agriculture, whether you want to go broad with a fund that holds a host of commodities or narrow with a cotton fund. Note that ETNs are debt instruments backed by the credit of the issuer. [Differences Between ETFs and ETNs.]
For more information on agriculture, visit our agriculture category.
- PowerShares DB Agriculture (NYSEArca: DBA)
- UBS E-TRACS CMCI Food TR ETN (NYSEArca: FUD)
- UBS E-TRACS CMCI Agriculture TR ETN (NYSEArca: UAG)
- UBS E-TRACS CMCI Livestock TR ETN (NYSEArca: UBC)
- ELEMENTS Rogers Intl Commodity Agri ETN (NYSEArca: RJA)
- iPath DJ-UBS Agriculture TR Sub-Idx ETN (NYSEArca: JJA)
- iPath DJ-UBS Cotton (NYSEArca: BAL)
- iShares S&P GSCI Commodity-Indexed Trust (NYSEArca: GSG)
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.