With the global population increasing and access to adequate farmland moving in the opposite direction, more innovation and technology is needed in the agriculture industry. Some agribusiness companies are answering that call, making the VanEck Future of Food ETF (YUMY) a valid consideration for tactical exposure to megatrends.
Farming is evolving. With that comes potentially positive implications for YUMY, which taps into next-gen agribusiness and sustainability.
YUMY, which debuted in November 2021, is an actively managed ETF. That ‘s an important characteristic, given manager flexibility can be an advantage when accessing an emerging megatrend.
“Consider the gradual worldwide decrease in agricultural land per person, which is down nearly 50% since 1961,” according to Fidelity. “As this trend continues, new and more-efficient farming and food production may become more necessary to support the needs of a growing global population. The long-term agriculture megatrend has and continues to produce investment opportunities as companies seek to meet this growing global demand for food. And this is just one of a variety of megatrend investing opportunities that investors may be able to capitalize on.”
This ETF Captures Exposure To The Future of Agribusiness
YUMY holds 39 stocks, which the run the gamut of the agribusiness ecosystem. Holdings such as Deere (DE), Bunge (BG) and Nutrien (NTR) are industry leaders in modernizing food production. That’s important because the global population continues increasing.
“Global population is expected to reach almost 10 billion by 2050, up from more than 8 billion today, according to estimates from the United Nations,” added Fidelity.
Global food production will need to increase by at least 50% by 2050 to meet population demands. That underscores the importance of identifying the industry leaders, as YUMY does.
Changing demographics and the finite amount of suitable farmland also underscore the long-term investment thesis.
“A growing middle class and rising wages have led to shifts in consumer preferences including healthier options and increased protein consumption, further increasing the need for greater productivity,” concluded Fidelity.
Bottom line: Farming and food production need to evolve to keep pace with global population growth. Some YUMY constituents are driving forces behind that necessary evolution.
For more news, information, and analysis, visit the Beyond Basic Beta Channel.
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.