Amid Inflation and Food Shortages, These Are the Food Stocks To Bet On

It's been more than a year since the food crisis started, with shortages and soaring prices. Some investors see it as an opportunity. What are the best food stocks to buy?

The food shortages have been worsened by the ongoing Russia-Ukraine war. The two countries are major food exporters, especially to Europe and Africa. Consumers in these countries have been worried about shortages of basic food products like wheat.

Until now, most there have only been some localized shortages of specific items in the U.S. Joe Biden has been warning of shortages due to Russian sanctions, but the U.S. Department of Agriculture has maintained that there isn't a nationwide food shortage yet. As a net food exporter, U.S. isn't likely to face a severe shortage.

Tyson Foods is one of the best bets on the continued consumption of meat and protein in the U.S. As people slash their discretionary food budgets due to rising inflation and dropping affordability, companies positioned in staples should do well. Tyson Foods is also a big supplier in the global food market. The company has boosted its sales outlook for fiscal 2022 to $52 billion–$54 billion from $49 billion–$51 billion, as it sees consumers still buying its products despite the higher prices.

Right now, vertical farming is one of the hottest technologies in agriculture. Companies that specialize in it produce food without relying on an immense amount of land and resources. AppHarvest, the first publicly traded agriculture technology company in the U.S., claims to use 90 percent less water than traditional open-field farming. Its 60-acre flagship facility is one of the world's biggest indoor farms.

Archer Daniels Midland (ADM), a U.S. multinational food processing and commodities trading corporation, is connected to food at the agricultural production level. As grain shortages loom, ADM has been grabbing investors' attention due to its key role in the production of corn, wheat, and cooking oil. Its second-quarter results came in well beyond expectations.