Are these 5 NZX agriculture stocks worthwhile ahead of 2022?

Highlights 

• The NZ government is investing in new research projects related to regenerative farming practices.
• PGG Wrightson upgraded its operating EBITDA to around $58 million for FY22.
• Fonterra raised its Farmgate milk price range to $8.40-$9.00 per kgMS for the 2021/22 season.

Agriculture Minister Damien O’Connor announced on Monday that the government was investing in 2 new research projects. The projects will examine the effect of regenerative farming methods.

The NZ government is offering $2.8 million in a $3.85-million project that has the objective to understand managing soil health to enhance economic and environmental performance on NZ farms. The project has co-investment by Synlait and Danone.

Image source: © 2021 Kalkine Media, Data source- EODHD/Others

Another project has got a contribution of $2.2 million to boost farm yields by drawing beneficial insects to the farms using certain techniques.

Let’s have a look at how these 5 NZX agricultural stocks are doing.

Allied Farmers Limited (NZX:ALF)   

Provider of livestock trading and property-related services, Allied Farmers, advised that NZRLM has got a $758K transaction fee from NZRLM on completing its recently announced transaction on 10 November.

ALSO READ: How are 3 NZX wine stocks doing amid soaring demand?

The Group advised that NZRLM has paid a cash distribution of $800K to its partners, of which 50% is payable to ALF.

ALF ended the day 2.38% in green to close at $0.86.

PGG Wrightson Limited (NZX:PGW) 

Major provider to the agricultural market, PGG Wrightson, upgraded its operating EBITDA to around $58 million for FY22 after witnessing great spring trading in the first half of FY22.

Rodger Finlay, PGW’s Chairman, stated that the Group remained resilient to the Company’s response to COVID-19-operating protocols.

PGG ended the day 2.53% in green to close at $4.46.

Fonterra Co-operative Group Limited (NZX:FCG)

NZ-based dairy co-operative, Fonterra, raised its forecast range of milk prices it pays to farmers to $8.4-$9 per kgMS for the 2021/22 season due to strong demand and constrained supply. This led FCG to upgrade its earnings guidance to 25-35ps compared to 25-40cps.

RELATED READ: Is Fonterra (NZX:FCG) the largest dairy company worldwide?

Fonterra’s milk supply in NZ was also down by 3% in Q1 on pcp.

FCG ended the day flat to close at $3.14.

Comvita Limited (NZX:CVT)

Health supplements provider, Comvita, notified that it had issued performance share rights that are convertible into fully paid ordinary shares in CVT. This can happen only if some vesting conditions and performance hurdles are fulfilled under CVT’s Performance Share Rights Scheme.

CVT ended the day flat to close at $3.4.

Scales Corporation Limited (NZX:SCL)

Diversified agribusiness group Scales delivered an impressive performance for the 6 months ended 30 June 2021 across all its 3 segments despite facing COVID-19-induced disruptions.

DO READ: Which 2 NZX food stocks can be considered amid inflation?

Scales hired Geoff Smith as the Chief Operations and Sustainability Officer of the Group, with his term due to begin in January 2022.

SCL ended the day flat to close at $5.38.

Bottom Line

Pursuing farm sustainable practices can not only help in keeping soil healthy. It can also protect the environment and play a part in mitigating climate change.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)