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12 Best Agriculture ETFs To Buy

Hamna Asim
13 min read

In This Article:

In this article, we discuss 12 best agriculture ETFs to buy. If you want to skip our discussion in the agriculture industry, head directly to 5 Best Agriculture ETFs To Buy. 

A July 2023 report by the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD) predicts that global agricultural and food production will continue to grow over the next decade but at a slower rate compared to the last ten years. This slower growth is attributed to demographic factors. Despite uncertainties like geopolitical tensions, climate issues, and price volatility for agricultural inputs; crops, livestock, and fish production are projected to increase at an average annual rate of 1.1%. Food consumption is expected to rise by 1.3% per year until 2032, indicating an increase in the use of agricultural commodities as food. The projections assume a swift recovery from recent inflation and no key policy changes. However, ongoing inflationary pressures could negatively impact global food demand and production. The report also emphasizes the significance of policies to ensure greater efficiency and food security, especially in light of skyrocketing farming input prices that can burden the poor, who spend a higher proportion of their budget on food.

QU Dongyu, Director-General at FAO, commented: 

“The broad trends outlined in this report are heading in the right direction, but need to be accelerated. Promoting a faster shift to sustainable agrifood systems will bring many benefits and help usher in better lives for all, leaving no one behind.”

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Similarly, according to Mathias Cormann, Secretary-General at OECD: 

“Surges in agricultural input prices experienced over the last two years have raised concerns about global food security. Investments in innovation, further productivity gains and reductions in the carbon intensity of production are needed to lay the foundation for long-term food security, affordability and sustainability.”

In terms of agricultural commodities, the report by FAO and OECD highlighted some key figures. For example, the demand for cereal production is expected to slow down, mainly because per capita food consumption of most cereals has reached saturation levels in many countries. By 2032, it is estimated that 41% of all cereals will be consumed by humans, 37% will be utilized for animal feeds, and the remaining will be used for biofuels and other industrial purposes. The growth in global crop production will be supported by advancements in plant breeding and a shift towards more efficient production techniques. Moreover, the increase in sugar consumption globally will be mainly attributed to Africa and Asia. On the other hand, high-income countries are likely to experience a continued decline in sugar consumption. Global per capita meat consumption is forecasted to increase by 0.1% per year, largely propelled by middle and lower-income countries. Fish available for food consumption is expected to grow worldwide, with the fastest growth anticipated in Africa. Poultry meat is expected to account for almost half of the increase in total meat production through 2032. Lastly, world milk production is estimated to grow at a rate of 1.5% annually over the next decade, with more than half of the increase coming from India and Pakistan. These two countries together will contribute to almost one-third of global milk output in 2032.

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