In this article, we will look at the 10 Worst Farmland and Agriculture Stocks to Buy According to Short Sellers.
The $5 trillion food and agriculture sector has experienced significant changes over the past six decades. Technological advances, resource allocation, and production processes drove these changes. The global agricultural output has been impacted by the Green Revolution of the 1960s as well as the advancements in modern biotechnology. According to the US Department of Agriculture (USDA), the production of the agriculture sector quadrupled between 1961 and 2020. This jump is largely due to technological advancements and increased land use. Therefore, innovations over the years have enabled the sector to meet the ever-increasing demand. However, this industry is still facing challenges. Productivity growth has stunted over the past decade, which creates concerns regarding the sector’s ability to meet the world’s increasing demand.
Furthermore, the global agricultural sector has changed dramatically over the years, owing to the increasing involvement of the Global South (Africa, Asia, and Latin America) in overall production. The region contributed an astounding 73% to the global output by 2020. According to McKinsey & Company, the Global South’s contribution to overall production is expected to grow as emerging markets look to modernize their agricultural sectors. Such a change has been majorly driven by technological changes in crop science, irrigation systems, and machinery, enabling the sector to gain larger yields given the same amount of land. Moreover, easing inflation in the U.S. toward the end of 2024 resulted in reduced input costs, especially energy costs, meaning improved margins for the sector.
However, the Total Factor Productivity (TFP) – an important metric for assessing resource management efficiency in agriculture – has faced a slump in recent years. The global TFP has dropped to 0.9% in the last decade, compared to 1.6% in the early 2000s. With the global food demand expected to increase by 60% by 2050, a slowdown in productivity growth comes as a major concern. This stagnation could lead to a rise in food prices, an expansion of agricultural land, and elevated pressure on ecosystems that are already under pressure due to climate change. Around such skepticism, the Farm Products sector has experienced negative returns on a YTD and 6-month basis, while S&P reported 5.80% return on a 6-month basis.
To mitigate these concerns, the agricultural sector needs to counter the global demand with sustainability. Accordingly, McKinsey highlights the need for investment in innovative technologies like precision agriculture, artificial intelligence, and satellite-based monitoring systems. Such technologies can add to efficiency as well as a reduction in the industry’s environmental footprint. For instance, farmers are now able to make informed decisions through AI-driven data analytics, leading to an improvement in yield forecasting and optimization of input usage. It is expected that investment in relevant technologies could lead to an increase of over 25% in the agricultural output over the next 10 years, according to McKinsey.
With this background in mind, let’s take a look at the 10 Worst Farmland and Agriculture Stocks to Buy According to Short Sellers.
A farmer driving a tractor over his field with a picturesque backdrop of the setting sun.
Methodology
For this article, we shortlisted a list of stocks within the agricultural inputs and farm products sectors using the Finviz screeners. We also considered our previous articles on the industry to ensure relevant inclusions in our list. Using the extensive list, we selected companies that demonstrated strong market capitalization.
Next, we looked into the number of hedge funds invested in these companies, which is considered a dependable indicator of firm performance. Moreover, we noted down the short percentage of float for all the companies, which is a testament to the negative sentiment or short interest in the stock. Finally, the shortlisted stocks were ranked in ascending order of their short percentage of float.
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10. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Funds: 38
Short % of Float: 2.75%
Archer-Daniels-Midland Company (NYSE:ADM) is one of the top companies trading in agricultural commodities. The company specializes in procuring, processing, and transporting key crops, such as soybeans, corn, and wheat. The company plays a key role in the production of food, supplying essential ingredients and feedstock worldwide. However, it has faced some challenges, impacting its agricultural operations.
ADM reported an adjusted EPS of $1.14 for Q4 ended December 31, 2024, and an EPS of $4.74 for the full year, which aligns with the forecast. The total segment operating profit for the quarter was $1.1 billion, and $4.2 billion for the full year. Interestingly, Archer-Daniels-Midland Company (NYSE:ADM) has reported a decrease of 32% in its quarterly operating profit, owing to oversupply pressures and lower margins in soybean crush. Moreover, the company’s profits saw a 40% decline for the full year, which reflects the overall market fluctuations. Despite these setbacks, the company’s starches and sweeteners segments performed well, driven by improvement in plant efficiency.
Regardless, Archer-Daniels-Midland Company (NYSE:ADM) looks to continue its investments in innovation, with a particular interest in regenerative agriculture. Recently, the company was awarded the 2025 BIG Innovation Award owing to its sustainability initiatives. These initiatives look to improve soil health and reduce greenhouse gas emissions.
Additionally, the company holds an operating cash flow of $3.3 billion before working capital, which reflects on the strength of its balance sheet. The company also initiated its share repurchase program, and its quarterly dividend saw an increase, making it its 93rd year of continual payout.
While Archer-Daniels-Midland Company (NYSE:ADM) looks to position itself for long-term fortitude, it faces short-term concerns like fluctuations in commodity prices and changing biofuel policies. As such, it experiences supply-related disruptions. With this, the stock’s short-selling activity remains on the higher side, making it one of the worst farmland and agriculture stocks, as per the short selling activity.
9. The Mosaic Company (NYSE:MOS)
Number of Hedge Funds: 41
Short % of Float: 3.11%
The Mosaic Company (NYSE:MOS) is one of the top producers of phosphate and potash fertilizers, which are essential sources of crop nutrients. The company plays a vital role in the global agriculture industry through its Phosphates, Potash, and Mosaic Fertilizers segments.
The company reported revenue of $2.8 billion for the quarter ended September 30, 2024, as well as net income of $122 million and an adjusted EBITDA of $448 million. Mosaic faced operational challenges during this quarter, such as electrical problems at its Esterhazy and Colonsay potash mines, and weather-related disruptions. These setbacks led to a temporary decline in their production. However, the company was able to restore its operations, now on track to meet its production targets of 7.8 to 8.2 million tons of phosphate annually.
The Mosaic Company (NYSE:MOS) has faced pricing pressures and production losses of 250,000 tons for its Potash segments. These losses are attributed to power outage and weather-related disruptions as discussed above. However, the market is now emanating signs of stability. The company reported an EBITDA of $265 million for its Phosphates segment due to stronger stripping margins and efficient management of its supply chain. To improve profitability and efficiency, the company has put into action a $150 million cost-cutting strategy. This strategy primarily focuses on reducing operational costs and optimizing production capacity.
Furthermore, The Mosaic Company (NYSE:MOS) expects the demand for fertilizers to remain strong as crop production increases, especially in Brazil and Southeast Asia. Potash pricing has also seen a reversion after its initial declines due to overall demand recovery and compact supply.
While the company’s efforts to optimize operations, manage costs, and streamline its asset portfolio put it in a strong driving position moving forward, The Mosaic Company (NYSE:MOS) still faces concerns regarding market volatility as well as supply disruptions. Furthermore, Potash pricing projections still remain uncertain, posing increased risks. Thus, the sentiment remains skeptical among the short sellers regarding the stock’s short-term outlook.
8. Ingredion Incorporated (NYSE:INGR)
Number of Hedge Funds: 36
Short % of Float: 3.24%
Ingredion Incorporated (NYSE:INGR) supplies starches, sweeteners, and biomaterial solutions across the globe. These solutions cater to industries including food and beverage, and industrial applications. The company has a footprint in North America, South America, Asia-Pacific, Europe, Africa, and the Middle East, playing an important part in catering to evolving consumer and industry needs by providing ingredient solutions.
The company reported net sales of $1.8 billion for Q4 ended December 31, 2024, which is a decline of 6% compared to the previous year. On the other hand, Ingredion Incorporated (NYSE:INGR) reported a 12% increase in its gross profit and a 420-basis points improvement in its margin, which now sits at 25%. The adjusted operating income was $248 million, a 22% increase, primarily driven by lower raw material costs, increased sales volume, and strategic pricing adjustments. This growth was led by the company’s Texture & Healthful Solutions segment, which achieved a double-digit increase in sales for the second consecutive quarter.
Moreover, Ingredion Incorporated (NYSE:INGR) has looked to aggressively improve its operational efficiencies through its Cost2Compete program. This program was able to achieve its savings target by over 30% for the first year. Furthermore, the company is looking to reduce costs by $50 million by 2025 through efficient sourcing, network optimization, and the closure of smaller facilities in the U.K., Canada, and Brazil. Ingredion has also announced an investment of $50 million in its Cedar Rapids, Iowa facility in February 2025. This investment will increase the production of industrial starch used by the packaging and papermaking industries, bolstering the company’s commitment to innovation and sustainability.
While Ingredion Incorporated (NYSE:INGR) is making efforts to expand its portfolio and improve efficiency, it is suffering from rapidly changing corn prices. These fluctuating prices negatively impact its overall efficiency. Furthermore, soft sweetener demand further impacts its demand and revenue projections negatively. As such, short sellers remain pessimistic for the stock, making it one of the Worst Farmland and Agriculture Stocks to Buy According to Short Sellers.
7. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Funds: 45
Short % of Float: 4.90%
CF Industries Holdings, Inc. (NYSE:CF) is one of the largest suppliers of nitrogen-based fertilizers, which play a crucial role in improving soil fertility and increasing crop yields. The company produces ammonia, granular urea, and urea ammonium nitrate (UAN), which are extensively used by farmers and agricultural businesses to increase their production.
CF Industries Holdings, Inc. (NYSE:CF) reported an adjusted EBITDA of $562 million for Q4 ended December 31, 2024, and $2.3 billion for the full year. These positives, supplemented by steady fertilizer demand, helped the company perform strongly during the quarter. Similarly, net earnings for 2024 were reported to be $1.2 billion, emanating from operational efficiency. As a result of making the profits, the company was able to return $1.9 billion to its shareholders through dividends and share repurchases, which is the highest by the company in over a decade.
Furthermore, CF Industries Holdings, Inc. (NYSE:CF) was able to utilize its full capacity, producing 2.6 million tons of gross ammonia in the fourth quarter and 9.8 million tons for the full year. The company has forecasted production of 10 million tons of ammonia in 2025, highlighting its crucial role as a supplier for the agricultural sector. With the company’s Donaldsonville facility set to start its operations in 2025, CF Industries is continuing to move forward with its carbon capture and sequestration (CCS) projects.
Under the rising global corn demand and limited growth in supply, the nitrogen fertilizer market looks favorable. CF Industries Holdings, Inc. (NYSE:CF) expects strong nitrogen application rates as the U.S. corn acreage is expected to increase in 2025, adding to fertilizer demand. Moreover, major global urea producers facing supply-related issues, such as India’s ongoing challenges in securing tender volumes, further cemented pricing support for nitrogen-based fertilizers.
However, the company still faces issues related to nitrogen price fluctuations and potential changes in regulations. The company looks to counter these concerns and ensure long-term success through its strong production network, ongoing investment efforts in low-carbon ammonia, and its focus on catering to agricultural demand. Despite its ongoing efforts, pessimism remains among the short sellers, which makes CF Industries one of the Worst Farmland and Agriculture Stocks to Buy According to Short Sellers.
6. CNH Industrial N.V. (NYSE:CNH)
Number of Hedge Funds: 42
Short % of Float: 6.24%
CNH Industrial N.V. (NYSE:CNH) is one of the top agricultural and construction equipment producers. The company offers a plethora of machinery to farmers, including tractors, combines, and precision agriculture technologies. The company operates well-known brands, New Holland Agriculture and Case IH, enabling it to supply essential tools for modern farming globally.
The company reportedly drove net sales of $4.1 billion through industrial activities for Q4 ended December 31, 2024. This was a decrease of 31% from the previous year, owing to lower industry demand and reductions in dealer inventory. Similarly, net sales for the whole year were reported to be $17.1 billion, which was a decline of 23% as a result of reduced sales of farm equipment. Moreover, the company reported an adjusted net income of $196 million for Q4 and diluted earnings per share of $0.15 per share, while its net income for the full year stood at $1.3 billion.
Additionally, CNH Industrial N.V. (NYSE:CNH) reduced its agricultural production hours by 34% in Q4 and 28% for the whole year, improving efficiency, to counter the declining demand. These advances helped lower stock levels by over $700 million at the dealer’s end in Q4. Through manufacturing process optimization and increasing operational efficiency, the company was able to achieve $600 million in cost savings.
Despite the challenges from the equipment market, CNH Industrial N.V. (NYSE:CNH) continued its investments in precision agriculture and upheld its pricing discipline. Accordingly, in-house production for precision components saw an increase to 80% in 2024 from 60% in 2023. This improvement furthered product innovation and cost savings. Furthermore, the company reported a net income of $379 million for the full year for its Financial Services segment, supplemented by efficient risk management and secure asset returns.
Under the market conditions, CNH Industrial N.V. (NYSE:CNH) projects its sales to drop by 13%-18% due to an expected decline in the demand for agricultural equipment by 5% to 10%. Having already experienced the decline in demand and inventory levels during the last quarter, skepticism is high among the short sellers, making CNH one of the worst farmland and agriculture stocks to buy according to short sellers.
5. Bunge Global SA (NYSE:BG)
Number of Hedge Funds: 38
Short % of Float: 6.50%
Bunge Global SA (NYSE:BG) manages the sourcing, processing, and distribution of essential crops like soybeans, wheat, and corn. The company plays a vital role in sustaining the global agricultural trade flows with a vast supply chain that supports animal feed, food production, and renewable fuels.
Bunge Global SA (NYSE:BG) recorded adjusted earnings per share of $2.13 per share for Q4 ended December 31, 2024, a drop from $3.70 in the prior year. Uncertainty surrounding U.S. biofuel regulations and margin pressures in South America were reflected through the company’s core business’s adjusted EBIT, which stood at $548 million. However, despite these challenges, results were stabilized due to improved merchandising performance and substantial processing operations in Europe and Asia. On the other hand, the milling segment posted mixed performance, with North American strength offset by weaker results in South America.
Furthermore, a significant progress was made regarding Bunge Global SA (NYSE:BG)’s $34 billion merger with Viterra, as Bunge acquired conditional approval from the Canadian government on January 12, 2025. Accordingly, the company is bound to invest at least $362 million in the country in the next five years and divest six-grain elevators in Western Canada. This merger will improve the company’s global footprint and supply chain efficiency. It is also recorded as one of the largest agricultural deals in history. In addition to that, Bunge has also been able to streamline processes and focus on core segments as it achieved the sale of its sugar and bioenergy joint venture in Brazil back in June 2024.
Moreover, strengthening its commitment to shareholder value in 2024, Bunge Global SA (NYSE:BG) repurchased $1.1 billion worth of shares, while also paying $378 million in dividends. Unfortunately, despite these strategic steps, the company is placed on the list of worst farmland and agriculture stocks to buy according to short sellers as it’s facing margin issues in South America and regulatory issues in the U.S.
4. The Scotts Miracle-Gro Company (NYSE:SMG)
Number of Hedge Funds: 33
Short % of Float: 7.01%
Scotts Miracle-Gro Company (NYSE:SMG) specializes in lawn and garden care, building its reputation by supplying a portfolio of fertilizer, hydroponic products, and soil solutions. The company caters to both traditional and indoor growers, and its operations are spread across the consumer lawn care market and the hydroponics sector.
Reflecting the stable demand in its core U.S. Consumer segment, The Scotts Miracle-Gro Company recorded $417 million in net sales for Q1 ended December 31, 2024. The company neutralized expected softness in its Hawthorne hydroponics division with an 11% volume increase in consumer lawn and garden products, reflecting its strong performance. Furthermore, lower material costs and supply chain efficiencies resulted in the gross margin rising to 24%, a significant improvement.
Additionally, Scotts Miracle-Gro Company’s (NYSE:SMG) multi-year Project Springboard initiative has already delivered $400 million in savings, showcasing the company’s focus on operational improvements. As part of its long-term efficiency plan, the company strives to cut an additional $75 million in supply chain costs in fiscal 2025. Alongside that, the company is growing its investments in marketing and consumer outreach, which includes a $40 million increase in brand support to drive engagement across all retail mediums.
The company’s Board of Directors authorized a cash dividend of $0.66 per share to enhance shareholder returns. It is to be paid on March 7, 2025. In addition to this, with a clear direction toward further balance sheet improvements, Scotts Miracle-Gro Company (NYSE:SMG) is lowering its leverage ratio to 4.52x net debt to adjusted EBITDA to continue to pay down debt.
However, amid the ongoing challenges in the hydroponics sector, short selling activity has remained high for the stock, placing it among the Worst Farmland and Agriculture Stocks to Buy.
3. FMC Corporation (NYSE:FMC)
Number of Hedge Funds: 48
Short % of Float: 7.18%
FMC Corporation (NYSE:FMC), which is a global agricultural sciences company, focuses on pest management, crop protection, and plant health solutions. The company runs its operations across Europe, North America, Asia, the Middle East, Latin America, and Africa.
FMC Corporation (NYSE:FMC) reported revenue of $1.22 billion, a 7% year-over-year increase, for Q4 ended December 31, 2024. This growth was attributed to the volume gains in its growth portfolio, which consists of innovative crop protection products and technologies. However, there was a 3% drop in average selling prices due to pricing pressure. The company, excluding divestitures, has forecasted revenue of $4.15 billion and $4.35 billion for 2025, while it reported revenue of $4.25 billion for 2024.
Cost reductions have been a core area of focus for FMC Corporation (NYSE:FMC), especially in regard to manufacturing efficiencies for Rynaxypyr and Cyazypyr. For 2024, FMC reported $265 million in cost savings, exceeding restructuring targets and estimating over $250 million by the end of 2025. Backed up by cost controls and volume growth, EBITDA for the last quarter of 2024 grew to $339 million, a 33% YoY rise. Furthermore, FMC announced its quarterly dividend of $0.58 per share as a part of its financial strategy, which would be payable on April 17, 2025. This reflects its commitment to shareholder returns while also funding long-term expansion.
In areas where distribution dynamics are evolving, particularly Asia and Latin America, FMC Corporation (NYSE:FMC) is optimizing inventory in key regions. To secure new market opportunities in biologicals and sustainable crop protection, the company is growing its sales organization. To maintain market leadership, the company is pivoting its focus towards new formulations, given that patent expirations are approaching for Rynaxypyr.
By positioning itself for sustained profitability and solidity in a shifting agricultural landscape, FMC Corporation (NYSE:FMC) plans to stay focused on long-term growth through invention and efficiency improvements.
Nevertheless, challenges such as growing competition from generics and foreign exchange headwinds are expected to impact earnings. Accordingly, short sellers remain heavy on the stock, which is why FMC is among the worst farmland and agriculture stocks to buy.
2. AGCO Corporation (NYSE:AGCO)
Number of Hedge Funds: 16
Short % of Float: 8.01%
AGCO Corporation (NYSE:AGCO) globally distributes, manufactures, and designs agricultural machinery and precision ag technology. Operating through brands like Fendt, Massey Ferguson, and Valtra, the company offers a diverse portfolio of tractors, grain storage systems, precision farming solutions, and seed processing equipment.
Looking at the financials, AGCO’s adjusted operation margin stood at 8.9%, while adjusted EPS was $7.50 in 2024. The tractor and equipment sales were globally impacted when the agricultural machinery sector witnessed its worst downturn since 2009. Despite this, highlighting the company’s ongoing transformation efforts and cost-management strategies, AGCO delivered a relatively strong margin performance.
Additionally, AGCO Corporation’s (NYSE:AGCO) newly established supply agreement with SDF aims to strengthen its low-mid horsepower tractor portfolio under the Massey Ferguson brand, which sets a significant milestone for the company. Expected to launch around mid-year, the company announced in early 2025 that this partnership will allow SDF to produce proprietary tractors of up to 85 horsepower. Aligning with the company’s Farmer-First approach, this step is set to improve AGCO’s presence in the segment and enhance market share.
By leveraging its PTx Trimble joint venture, AGCO Corporation (NYSE:AGCO) has set a goal to achieve $2 billion in Ag sales by 2029. However, elevated dealer inventories and continued product cuts persist, along with other near-term challenges. To decrease surplus inventory, the company intends to underproduce retail demand in the first half of 2025. Furthermore, the company anticipates a slight decrease in capital expenditures to $375 million and an increased tax rate of 35%-38% in 2025.
Despite industry-wide challenges and boosted short-selling activity, the share of AGCO Corporation (NYSE:AGCO) has risen 6.2% year-to-date, reflecting the company’s resilience amid the challenging environment. However, concerns have been raised about its near-term profitability due to weak demand and ongoing inventory corrections, which places it among the worst farmland and agriculture stocks to buy according to short sellers.
1. Cal-Maine Foods, Inc. (NASDAQ:CALM)
Number of Hedge Funds: 34
Short % of Float: 16.84%
Being the largest manufacturer and supplier of fresh shell eggs in the U.S., Cal-Maine Foods, Inc. (NASDAQ:CALM) supplies various conventional and specialty eggs. The company serves various grocery stores, club stores, and food service distributors across multiple U.S. regions. It promotes its products under leading brands such as Egg-Land’s Best, Land O’ Lakes, and Farmhouse Eggs.
Cal-Maine Foods, Inc. (NASDAQ:CALM) recorded net sales of $954.6 million for Q2 ended November 30, 2024. This marks a substantial increase from $523.2 million in the same quarter from the year before. In the same period last year, net income was $17 million, or $0.35 per share, which increased to $219 million, or $4.47 per diluted share during the quarter. The company profited from low supply levels due to Highly Pathogenic Avian Influenza (HPAI), causing surging rates, rising demand, and breakthrough sales volume. Accordingly, the sales for specialty eggs amounted to 120.2 million dozen, over a 25% year-over-year increase.
Furthermore, Cal-Maine Foods, Inc. (NASDAQ:CALM) Foods strives to make strategic investments to broaden its operations. The company plans to amplify its cage-free capacity, adding five new layer houses and two pullet houses across various states, costing approximately $60 million. Additionally, to facilitate the extended shelf-life of liquid egg products, the company plans to invest $15 million in the advanced development of its Georgia egg products processing facility. Looking ahead, by the next fiscal quarter, the company will intensify its production capabilities as it’s on track to bring an acquired processing plant and hatchery in Missouri online.
Cal-Maine Foods, Inc. (NASDAQ:CALM) had secured certain assets of Deal-Rite Feeds, Inc., which includes two feed mills and related operations in North Carolina, marking a significant expansion. By lowering feed expenses and enhancing supply chain efficiency for its regional shell egg operations, the acquisition aligns with the company’s strategy to optimize production costs. In addition to that, a $500 million share buyback program has been approved by the board to support shareholder value. Also, the company issued a quarterly cash dividend of $1.49 per share, in line with its variable dividend policy.
However, bearish sentiments have been driven by concerns over potential ownership restructuring, supply chain volatility, and ongoing risks from HPAI. This can be seen from the high short selling activity related to the stock, making it one of the worst farmland and agriculture stocks to buy according to short sellers, despite the strong performance of the company.
Overall, Cal-Maine Foods, Inc. (NASDAQ:CALM) ranks first on our list of the 10 Worst Farmland and Agriculture Stocks to Buy According to Short Sellers. While we acknowledge the potential of CALM, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CALM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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