12/23

Agricultural Sector Struggles Keep MOO Flat Amid Rising Costs and Regulatory Challenges

The VanEck Agribusiness ETF (MOO) is experiencing downward pressure due to a challenging environment for the agricultural sector. Farmers are facing significant economic struggles, with crop prices for corn, wheat, soybeans, and cotton dropping by 37%, 37%, 28%, and 22% respectively. Despite these price declines, production costs have surged by nearly 30% since 2020, driven by high fuel and fertilizer expenses. This has led to financial strain across the sector, with many farmers incurring losses even on prime cropland. Additionally, traditional safety nets like the Agriculture Risk Coverage and Price Loss Coverage programs have not kept pace with inflation, providing minimal relief to struggling farmers.

The ETF's performance is further impacted by regulatory changes, such as the EPA's new strategies to protect endangered species, which are likely to increase costs for farmers. These strategies include mitigation measures that could cost U.S. farmers billions, adding to the financial burdens already faced by the agricultural community. The complexity and potential financial impact of these regulations are causing concern among farmers, who are already dealing with reduced net incomes and limited access to credit.

The VanEck Agribusiness ETF (MOO) closed at $64.75, with a slight decline of 0.11% after market hours on December 23, 2024.