Press Release: Fitch Affirms Archer Daniels Midland's Ratings At 'A', Outlook Negative -3

Al Root

President Donald Trump is going to help American farmers. It will help American investors a little bit, too.

Trump will announce $12 billion in aid to U.S. farmers, who are beset by rising costs and trade uncertainty.

The money is nice, but it doesn't amount to much. It works out to about $6,300 per farm. There are about 1.9 million farms in the U.S., according to the Department of Agriculture, which estimates 2025 farm income of about $180 billion, or about $95,000 per farm.

The U.S. and other countries have a history of supporting farmers. Annual support to farmers tops $840 billion globally, according to the Organization for Economic Cooperation and Development, which tracks spending across 54 countries. Payments in the U.S. are expected to top $40 billion in 2025.

There are good reasons to support farmers. Farming requires an enormous amount of working capital each year, and crops are subject to the whims of the weather. U.S. farming is an export business. America is one of the largest grain producers in the world.

An extra $12 billion in the pockets of farmers could flow through to several stocks. Farmers buy products such as fertilizer, seeds, and crop protection from the likes of Mosaic, Corteva, and FMC. They also buy machinery from Deere, AGCO, CNH Industrial, and others.

The aid money is likely to benefit seed and crop protection makers sooner than machinery makers. Tractors are big purchases that aren't bought every year; one year of financial support might not make a difference there.

Ahead of the expected announcement, Corteva stock was down by 0.4%, Mosaic was up 1%, and FMC was down 1.6%.

Deere and AGCO shares were mixed. AGCO stock was up 0.3%.

Deere shares were down 0.6%, hovering around $473 after trading as high as $488.99. Its investor day had more to do with the move than farm subsidies. Deere management said the company was targeting 10% sales growth between fiscal year 2025 and 2030. Wall Street estimates don't go out that far; however, analysts project about 8% growth between fiscal year 2025 and 2028. Management's goal looks aggressive, and investors appear to be taking a wait-and-see approach.

Then there is the next layer of companies in the farming ecosystem. Processors such as Bunge and ADM, grain buyers such as egg producer Cal-Maine and meat producer JBS, and packaged-food companies including General Mills and Kellanova might see some less obvious benefits.

Packaged-food stocks don't typically react to farm support. Grain costs are an important but relatively small piece of profit margins.

Grain prices matter more for processors and meat producers, but investors have to pay attention to spreads in those businesses — what those companies pay for inputs and sell as outputs matters more than the absolute price of corn or soybeans.

Shares of grain buyers were taking the news of extra support the worst. Shares of Bunge and ADM were down more than 1% each.

Cal-Maine shares were off 0.2%, while JBS stock was off more than 4%. That would indicate investors expect grain prices to rise, but demand for meat and other products stays flat. That hasn't happened yet. Benchmark corn futures were down 0.2% in midday trading on Monday. Soybean prices were down 1.1%.

The Consumer Staples Sector Select SPDR exchange-traded fund was down 0.7%, not too much different than the broader market. The S&P 500 and Dow Jones Industrial Average were down about 0.4%.

Of the stocks mentioned, Wall Street is lukewarm on most. The average Buy-rating ratio for shares in the S&P 500 is about 55%. The average Buy-rating ratio for food stocks is about 40%. The only food stocks listed with average Buy-rating ratios are Deere, with 56%, along with Bunge and Corteva, which have ratios of 73%. Kellanova has no buy ratings among its 16 analysts, according to Bloomberg.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Management highlighted strong operational execution in a tough 2025, with robust cash flow, ongoing portfolio optimization, and progress in decarbonization. Policy clarity on biofuels and trade is expected to drive margin improvement in 2026, supporting continued growth and dividend increases.

Based on Archer-Daniels-Midland Company [ADM] Goldman Sachs Industrials and Materials Conference 2025 Audio Transcript — Dec. 3 2025