In this article, we will look at the 10 Best Agriculture Stocks to Buy According to Hedge Funds.
Tariff Crisis in the US Agricultural Sector
On April 28, CNBC reported that while other US sectors are nearing what President Trump’s Treasury secretary Scott Bessent calls “an unsustainable tariff war”, the American farming sector has started to bear the effects of the economic crisis, with the damage already done. American agricultural exporters believe that the global backlash to tariffs imposed by Trump is punishing them, especially through a decrease in Chinese purchasing of US products. This trend is resulting in canceled export orders and layoffs.
Data from the US Department of Agriculture shows that China canceled its biggest pork orders since 2020, stopping the shipment of 12,000 tons of pork. CNBC reported that Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), a leading export trade group for farmers, opined that calling the number of canceled orders of US agricultural products could not be called “approaching a crisis”, as “it is a full-blown crisis already.”
AgTC also reported that its members are experiencing “massive” financial losses because of the trade war, based on the reports sent by member companies. A wood pulp and paperboard reported to AgTC the hold or immediate cancellation of 6,400 metric tons in a warehouse. It said that 9,000 metric tons of the product are already on their way to China through water, with the estimated arrival time being May 13. Chinese buyers may refuse to accept these shipments and abandon them at the port, which is why the threat of costly diversion to Chinese or other bonded warehouses looms over the journey.
READ ALSO: Recession Resistant Investing: 10 Best Grocery Stocks To Buy Now and 11 Most Promising Future Stocks According to Hedge Funds.
Markets Unable to Replace China’s Demand
China-to-US vessel traffic has also seen a steep decline. CNBC reported that according to the Vizion Global Ocean Bookings Tracker, the traffic is down 22.15% week-over-week and 44% year-over-year through April 14. Ben Tracy, Vizion’s vice president of strategic business development, said the following about the situation:
“What we’ve seen in the last two weeks is a continued correction in booking demand for US imports, especially US imports from China. We are now seeing this translate to a drop in departures as well.”
Agricultural exporters opined that no other global markets hold the potential to swiftly replace China’s demand and absorb the volume. These trends are already affecting operations and prices. CNBC reported that a lumber exporter told AgTC that some products have already fallen 20% in market value, which will likely impact future investments and inventory planning.
“The U.S. market was stable and improving, but now awash with inventory of former China products,” it said. “We have diverted employees and production to other (less profitable) production and dramatically slowed down purchasing from independent vendors (loggers, truckers, sawmills).”
With these trends in mind, let’s examine the 10 best agriculture stocks to buy according to hedge funds.
Aerial view of a vibrant wheat field, a representation of the fertilizers and crop nutrients this company provides.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 30 agriculture stocks and chose the top 10 most popular stocks among hedge funds. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is ordered in ascending order of the number of hedge funds as of fiscal Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Agriculture Stocks to Buy According to Hedge Funds
10. Calavo Growers, Inc. (NASDAQ:CVGW)
Number of Hedge Fund Holders: 22
Calavo Growers, Inc. (NASDAQ:CVGW) markets and distributes fresh and prepared avocados globally. The company operates in two segments: Prepared and Grown. The Grown segment comprises fresh avocados, papayas, and tomatoes. The Prepared segment manages guacamole products and avocado pulp.
Calavo Growers, Inc. (NASDAQ:CVGW) has gained positive investor sentiment through its strong fiscal Q1 2025 results. It reported a gross profit of $15.7 million in fiscal Q1 2025, 46.2% growth from the prior-year quarter. Its Fresh segment’s gross profit rose 88.8% compared to the same quarter last year, reaching $12.1 million.
Analysts are bullish on the stock, ranking it tenth on our list of the best agriculture stocks to invest in. On April 16, Lake Street analyst Ben Klieve maintained a Buy rating on Calavo Growers, Inc. (NASDAQ:CVGW), setting a price target of $35.00.
9. Vital Farms, Inc. (NASDAQ:VITL)
Number of Hedge Fund Holders: 30
Vital Farms, Inc. (NASDAQ:VITL) packages, markets, and distributes pasture-raised butter, shell eggs, and other products. It sells its products primarily to retail food service channels under the trade names Vital Farms, Alfresco Farms, Lucky Ladies, and RedHill Farms.
On May 5, Andrew Strelzik, analyst from BMO Capital, initiated a new Buy rating on Vital Farms, Inc. (NASDAQ:VITL) due to the company’s strong growth potential and market position. The analyst reasoned that the company holds a leadership position in the pasture-raised egg segment with around 75% market share. The company also reported notable sales growth compared to the overall specialty egg segment. Its dominant market position and premium pricing strategy appeal to higher-income consumers, positioning it for continued revenue expansion.
The analyst expects Vital Farms, Inc. (NASDAQ:VITL) to benefit from an anticipated volume acceleration in H2 2025, exceeding its guidance for the year. Strategic expansion plans, such as increased production capacity and the addition of new family farms, also justify the buy rating for the stock.
