While the general economy has underperformed in the past several years, the crop farming sector has been not just stable, but profitable. A recent University of Illinois report comparing the returns from publicly traded companies from 2007 until the end of the first quarter of 2011 showed an 8.6% market value increase from agriculture-related companies, and companies in the S&P 500 experienced a decline of 2.7%.
“We looked at 21 agriculture-related Midwestern companies in five sectors: fertilizer, equipment, seed and genetic companies, crop production companies, and first processors,” said U of I graduate student Clay Kramer who created the index with agricultural economist Gary Schnitkey. “The overall goal was to build an AgIndex that measured the change in market value of publicly traded agricultural companies and compare it to the S&P 500, looking at their market values and how they did over time from 2007 up to the first quarter of 2011.”
The S&P 500 is an index that tracks the market values of 500 large companies in the United States.