It's Time to Profit from "Farmageddon"

by Andrew Zatlin June 28, 2022 11:10 am ET

“Farmageddon.”

Know what it is? If not, you’d better watch this video.

Meanwhile, if you’re already familiar, let me explain why it’s not going away…

And why there are so many opportunities to profit from it.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

It’s Time to Profit from “Farmageddon”

You’re seeing it at the grocery store. High prices. Crazy high prices.

Why? Because our food-supply chain is in crisis.

This is a predicament I’ve been calling “Farmageddon.”

Today, I’ll share the latest on this global catastrophe…

And show you how to profit from it.

Wanted: Wheat

The U.S. Department of Agriculture just announced that domestic wheat production will be down eight percent in 2022.

At first blush, no big deal, right? America can just rely on help from other countries.

Not so fast…

The Russians are the world’s largest wheat exporter. But for obvious reasons, we can’t rely on them right now.

Ukraine is the fifth-largest exporter. But we can’t rely on them, either.

For one thing, the country is being ravaged by war. Furthermore, ninety percent of Ukraine’s wheat is exported on ships that travel through the Black Sea — or that used to travel through the Black Sea.

That water is now under Russian control, and Ukraine’s attempts to find alternative shipping methods — exporting wheat via railroads, for instance — aren’t working.

Australia might be able to help. It’s got some extra production that can help the U.S.

But the U.S. isn’t the only country in need of wheat!

Every Aspect of Farming Is Getting Expensive

India, for example, needs to feed a billion people. And its wheat production is down ten percent. China has a billion mouths to feed, too. Its production is down, too.

This global scarcity is what’s leading to higher food prices.

But it’s not just the final product that’s getting more expensive. Every aspect of farming food — from gas, to fertilizer, to materials — is getting more expensive.

The question is: who are the “winners” in this whole mess?

An Opportunity with Private Labels

I’ll give you two:

The first is private-label food manufacturers. Let me explain what that means.

When you go to the grocery store, you’ll tend to see two versions of the same product on the shelf: a brand name you recognize (a Heinz, for example), and also a generic brand. For example, Whole Foods’ generic brand is called 365. It includes 3,500 “affordably priced” products that meet its standards.

The “365” brand name is a “private label.” It’s manufactured by a third party, and then marketed by Whole Foods. It’s generally the far more affordable option. And in tough economic times like we’re in today, this is where customers gravitate.

One of the biggest private-label food manufacturers is TreeHouse Foods (NYSE: THS):

TreeHouse is currently well off its highs. But given its prospects, and given the potential short squeeze that could happen here, this company’s stock has a lot of room to run.

My “Secret Weapon” Pick

Another “winner” in this market will be wholesale clubs…

Including one of my favorites, Costco (Nasdaq: COST).

Along with the low prices it offers, Costco enables you to get your food and gas in one place. With gas north of $5 per gallon, that’s a huge draw right now.

And the fact that this company’s stock has taken a fifteen percent beating — and is currently trading at a twelve-month low — means it could be a gift that keeps on giving.

But I’m not done yet…

If you’re a “Pro” subscriber, you’ll learn why one particular stock comes equipped with a “secret weapon” that could potentially send your portfolio skyrocketing.

In the meantime, Zatlin out. Talk to you soon.