The Zacks Agriculture - Products industry will benefit from the stable demand for food, supported by an increasing population. Rising consumer awareness regarding food ingredients and the preference for healthier options will drive industry expansion. Alternative and innovative agricultural technologies, such as hydroponics and vertical farming, are expected to serve as significant growth drivers due to their inherent advantages.

Companies like Bunge Global S.A. (BG Quick QuoteBG - Free Report) and GrowGeneration (GRWG Quick QuoteGRWG - Free Report) are poised to gain from strong end-market demand and their ongoing growth initiatives aimed at capitalizing on these trends.

Industry Description

The Zacks Agriculture – Products industry comprises companies that are either involved in storing agricultural commodities, distributing ingredients to others or engaged in farming crops, livestock and poultry products. Some are associated with purchasing, storing, transporting, processing and selling agricultural commodities or products derived from the same. They operate grain elevators, wherein income is generated from commodities bought and sold using these elevators or held as inventory. Some companies provide nutrients, advanced indoor and greenhouse lighting, environmental control systems, and accessories for hydroponic gardening — the method of growing plants using mineral nutrient solutions in a water solvent instead of soil. A few players offer innovative, plant-based health and wellness products. Companies producing lumber also fall under this industry.

Trends Shaping the Future of the Agriculture - Products Industry

Solid Demand to Support Industry: The demand for food is directly influenced by population, demographic shifts and income growth. To capitalize on this, several agricultural and food-based companies are investing in innovation and augmenting their product and market strategies to bring new quality and healthy food ingredients to the market. Ongoing improvements in grain-handling techniques and investment in larger storage spaces will likely support the industry. Given that food remains an essential commodity regardless of the condition of the economy, the industry benefits from stable earnings across economic cycles.

Hydroponics & Cannabis Act as Key Catalysts: Hydroponics is gaining popularity as it gives growers the ability to regulate and manage nutrient delivery, light, air, water, humidity, pests and temperature in an indoor setting. This method enables faster crop growth, with higher yields than traditional soil-based cultivation. It is being utilized in new and emerging industries, including the cultivation of cannabis and hemp. Vertical farms producing organic fruits and vegetables also utilize hydroponics due to the shortage of farmland and environmental vulnerabilities. Vertical farming is the latest agricultural technology, wherein shelves and artificial lighting systems are used to grow produce, thereby minimizing land and water usage. While the cannabis industry has faced short-term challenges from pricing pressure, oversupply and regulatory uncertainties in some markets, its long-term outlook remains favorable as legalization expands, consumer acceptance grows and regulated markets continue to mature. 

Cost-Saving Actions to Aid Margins: Players in the industry are facing rising labor, packaging and distribution costs, among others. The U.S. Department of Agriculture (USDA) expects total production expenses, including those associated with operator dwellings, to rise 1% to $477.7 billion in 2026. Livestock and poultry purchases, feed and labor are likely to remain the largest expense categories. While spending on livestock and poultry purchases is projected to record the steepest increase, rising 9.7%, feed expenses are expected to decline 6.8% in 2026. The industry, however, continues to navigate a tight labor market with a spike in wages and higher distribution costs. They have been making efforts to bolster their financial conditions, conserve cash and improve profitability by implementing pricing and cost-reduction actions to sustain margins. However, the economic uncertainty stemming from tariffs poses challenges for industry players. 

Zacks Industry Rank Indicates Bright Prospects

The Zacks Agriculture - Products industry is part of the broader Zacks Basic Materials sector. The industry currently carries a Zacks Industry Rank #51, which places it in the top 21% of the 246 Zacks industries.

The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Before we present a few stocks worth considering for your portfolio, let us look at the industry’s recent stock market performance and valuation.

Industry Versus Broader Market

The Zacks Agriculture – Products industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have moved up 40.6% in the past 12 months compared with the S&P 500’s 26.7% growth. The Basic Materials sector has gained 30.1% in the same timeframe.

One-Year Price Performance

 

Industry's Current Valuation

On the basis of the trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing Agriculture - Products stocks, we see that the industry is currently trading at 8.76X compared with the S&P 500’s 18.40X. The Basic Materials sector’s trailing 12-month EV/EBITDA is 13.25X. This is shown in the charts below.

Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)

Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)

Over the last five years, the industry traded as high as 11.00 and as low as 3.68X, the median being 5.33X.

 

2 Agriculture - Products Stocks to Keep an Eye on

Bunge: The company completed the acquisition of Viterra in July 2025, which created a premier global agribusiness solutions company for food, feed and fuel, well-positioned to meet the demands of increasingly complex markets and better serve farmers and end customers.  Bunge is positioning itself as a scaled, pure-play global agribusiness solutions platform with an integrated “origin-to-customer” footprint across oilseeds and grains, supported by a global value-chain operating model and centralized risk management designed to optimize logistics, capture arbitrage and manage exposures through volatile markets. Management also highlights an expected increase to at least $15 in earnings per share by the end of 2030 (from the $8.50 in 2025), supported by the ramp-up of inflight capital projects, Viterra integration, alongside ongoing cost synergies and productivity work. For shareholders, Bunge emphasizes cash generation through the cycle, a commitment to return at least 50% of discretionary cash flow via dividends and buybacks, and maintaining an investment-grade balance sheet (to support both growth and shareholder returns). 

Bunge is an integrated global agribusiness and food company covering the farm-to-consumer food chain. The Zacks Consensus Estimate for the St. Louis, MO-based company’s earnings for 2026 suggests year-over-year growth of 26.4%. The estimate has moved up 17% over the past 60 days. BG has a trailing four-quarter earnings surprise of 27.5%, on average. BG currently sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price & Consensus: BG

GrowGeneration:  The company delivered the second consecutive quarter of year-over-year revenue growth in the first quarter of 2026, driven by continued strength in its commercial B2B division and the benefits of a more focused operating footprint. Cost-reduction initiatives are also yielding tangible results, contributing to a $2.4 million improvement in adjusted EBITDA and a reduction in net loss in the quarter. The company is also advancing its strategy to expand higher-margin proprietary brand sales, which accounted for 37% of Cultivation and Gardening net sales during the quarter, and remains on track to reach its 40% year-end goal. Looking ahead, GrowGeneration expects further gains in gross margin and operating efficiency throughout 2026. Supported by inventory optimization efforts, full-year gross margins are projected to range between 27% and 29%. The company also expects to reach breakeven adjusted EBITDA for the full year, with profitability improving as the year progresses. Profitable second and third quarters are anticipated, driven by the outdoor cultivation season, stronger margins and a leaner operating cost structure compared with 2025. The company’s acquisition strategy focused on acquiring well-established, profitable hydroponic garden centers and proprietary brands, and private-label brands bode well.

Greenwood Village, CO-based GrowGeneration owns and operates retail hydroponic and organic gardening stores in the United States. The Zacks Consensus Estimate for the company’s fiscal 2026 bottom line is pegged at a loss of 22 cents per share, suggesting a narrower loss from the 40 cents incurred in fiscal 2025. The estimate has moved up from a loss of 23 cents 60 days ago to the current projected loss of 22 cents. GRWG currently carries a Zacks Rank #3 (Hold).

Price & Consensus: GRWG