InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

How To Collect Your Share of My Million Dollar Giveaway

How To Collect Your Share of My Million Dollar GiveawayWe recently kicked off the most outrageous initiative in the history of investment research. It’s called the Income Millionaire Project. And the goal is simple: create 1,000 income millionaires. That’s a $1 billion goal! No one has ever tried it before, but that doesn’t bother me. I’m so sure you can use this program to make a million bucks… I’ll pay you $1,000 to start your journey. Go here for details.

 

Overseas Farmers Gain from NAFTA’s Pain

By Benjamin Shepherd on May 3, 2017

After threatening to extricate the United States from the NAFTA trade deal with Canada and Mexico, which removed tariffs and boosted trade between the three countries, President Trump has now committed to renegotiating the deal.

However, in the process of those talks, it’s likely that at least Mexico will be opening its own doors with other countries. That spells investment opportunities in agricultural and food-related companies; we examine two well-positioned plays now.

Two years ago, roughly 13% of American-grown corn was exported and 23% of that went to Mexico. In fact, nearly 98% of the corn consumed in Mexico comes from the U.S. That corn trade is worth nearly $3 billion to American producers, while Mexico also bought $1.5 billion worth of American soybeans, and more than $1 billion worth of pork and dairy products. Mexico isn’t thrilled that it’s so dependent on U.S. food products.

Now, as NAFTA gets re-negotiated and America increasingly resembles a rival rather than partner, Mexico is rethinking its southern trade strategy, with trade talks reportedly underway with Brazil and Argentina. This new political reality could be a boon for two companies in particular.

Brazil-based BRF (NYSE: BRFS) is a major producer of poultry and pork, with annual sales of more than $30 billion. The company’s shares have taken a hit lately after police accused it and another major Brazilian meat packer of paying bribes and operating unsanitary facilities. Details are still scarce and it looks as if the allegations might have been politically motivated. Regardless, a number of countries have suspended meat imports from Brazil until they have been reassured about their safety.

At any rate, if Mexico reduces trade barriers to foodstuffs from Brazil, BRF would be one of the greatest beneficiaries. That’s especially true since Latin American countries other than Brazil only account for about 14% of the company’s revenue, mostly because of unfavorable trade conditions. Despite the recent scandal, BRF’s shares have a lot of upside potential as the future of trade in the Western Hemisphere remains up in the air.

Another potential winner, which isn’t impacted by the recent upheaval in Brazil, is Adecoagro (NYSE: AGRO). Headquartered in Luxemburg, this company owns hundreds of thousands of acres of prime farmland in Brazil, Argentina and Uruguay and produces corn, wheat, soybeans, cotton, rice and dairy products.

A smaller company with a market cap of only $1.3 billion and about $870 million in sales last year, Adecoagro’s management has already said that it would be eager to work with the Mexicans, particularly if Brazilian and Argentine products get the same favorable treatment as American ones. Considering that Mexico must be questioning the wisdom of being so dependent on U.S. agricultural products, that seems likely.

While American farmers have to be worried about how the NAFTA renegotiation will play out, watchful investors can still profit from this hemispheric trade realignment.


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.