The VanEck Agribusiness ETF (MOO) is experiencing downward pressure due to a confluence of factors affecting the agricultural sector. Recent reports highlight the ongoing struggles of U.S. farmers who are grappling with high input costs and low commodity prices. Despite a slight recovery in wheat prices, the strong U.S. dollar and persistent inflation have continued to exert downward pressure on commodity prices, impacting farmers' profitability. Additionally, the USDA's 2024 Farm Sector Income Forecast indicates a decline in farm financial health, with working capital expected to decrease by 9.1% from 2023, further exacerbating the financial strain on farmers.
Moreover, the aftermath of Hurricane Helene has left a significant mark on the agricultural landscape, particularly in the southern U.S. The storm caused extensive damage to crops and infrastructure, with estimated losses reaching over $10 billion. Georgia's cotton farmers, for instance, suffered losses valued at $560 million, with many still recovering from previous hurricanes. This has compounded the challenges faced by the agricultural sector, leading to reduced productivity and financial instability. The combination of these factors has contributed to a challenging environment for agribusinesses, reflected in the performance of the MOO ETF.
The VanEck Agribusiness ETF (MOO) is down 2.12% in pre-market hours on Monday, December 23, falling to $65.50 as of 7:34 AM ET.