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President Trump’s return to the White House in 2025 is accompanied by all sorts of speculation regarding his trade policies and import tariffs. The US agricultural industry is preparing for change. Trump signed the Agricultural Improvement Act of 2018 (aka the Farm Bill), but it technically expired on September 30, 2024. Congress extended the law until the 2025 growing season.

While Trump seeks to cut the work of government regulators, including the USDA and FDA, his priority is to support industry in the United States to reduce dependence on exports. There is a high likelihood that Trump will approve increased payments to American farmers, which could help boost equipment upgrades and finance purchases at a time of falling interest rates. His “storm, baby, storm” stance to support domestic oil and gas production could lead to lower fuel costs and improved profitability for agricultural companies. Two agriculture-related companies could benefit from a Trump presidency to boost the consumer goods sector.

Corteva: Protecting seeds and crops will strengthen America’s food supply

As a leading supplier in the agricultural industry, Corteva Inc. New York Stock Exchange: CTVA products are vital to maintaining the country’s food supply. Trump’s goal of reducing regulatory burdens could allow Corteva to bring new products to market faster in the fields of crop protection chemicals and genetically modified organisms (GMOs). Trump also opened up new markets through trade agreements such as USMCA, which replaced NAFTA in his first term, and could continue to push for favorable trade agreements to help increase demand for U.S.-grown crops. Trump’s extension of the 2017 tax cuts will allow Corteva and American companies to thrive in a more favorable tax environment. Agricultural subsidies, tax breaks and support for farmers will provide greater stability and investment in agriculture. Reducing raw material costs is a boon to operating margins.

Corteva Kitchen Sink Guide Sets the Bar Low

Corteva reported third-quarter 2023 loss per share of 49 cents, still missing analyst estimates by 19 cents. Revenue fell 5% year over year to $2.46 billion, missing the consensus estimate of $2.7 billion.

Corteva lowered its 2024 earnings per share forecast to $2.50 to $2.60, down from a previous range of $2.60 to $2.80 and below the consensus estimate of $2.67. 2024 revenue is now projected to be $17 billion to $17.2 billion, slightly below the $17.21 billion consensus. For 2025, Corteva expects revenue to be $17.3 billion to $17.7 billion, still missing the consensus $17.95 billion Following this update, shares fell more than 10% in the following days, reaching support from the daily 200-period moving average. average about $55.21.

Corteva Unveils Shareholder Value Strategy

Shares rose after Corteva revealed its new strategy aimed at increasing shareholder value. The new strategy refocuses the company on helping the world address the challenges of food security, climate change, as well as increasing extreme weather conditions and the impacts of insects, weeds and diseases. Innovation is the answer to any disease. The company presented six growth platforms:

• Seed and variety licensing allows the company to become royalty neutral by the end of 2028.
• By the end of the decade, the life sciences sector will reach $1 billion in annual revenue.
• New crop protection technologies will keep pace with increasing pressure from weeds, diseases and insects.
• Gene editing, including germplasm, will change the way the world farms.
• Biofuels will help meet growing fuel demand from long-haul shipping with low-carbon alternatives.
• Hybrid wheat, through its patented system, provides a yield advantage of 10% to 20% in water-stressed conditions.

Corteva will reinvest 8% of its sales into research and development, or $4 million per day, to anticipate and solve farms’ toughest problems.

Tractor Supply Co.: The Home Depot for Farmers and Rural Stylists

Tractor Supply Company NASDAQ:TSCO supplies materials and equipment to farmers, ranchers, gardeners, DIYers, contractors and rural stylists. The company has 2,270 stores in 49 states.

Trump’s policies to support rural America will benefit Tractor Supply’s customers, which will benefit them as dollars move down the chain. The stores sell everything from machinery, livestock feed, clothing, power equipment and machinery to generators, truck accessories and pet supplies.

Spending on major items was high

Tractor Supply reported third-quarter 2024 earnings per share of $2.24, in line with consensus estimates. Revenue rose 1.7% YoY to $3.47 billion, below consensus estimates of $3.8 billion. Comp sales decreased 0.2% YoY, reflecting continued growth in high-value categories, partially offset by year-round reduction of discretionary categories. Consumer, Consumer and Foods were mostly negative, with positive unit growth offset by average unit price pressure. The company opened 16 new Tractor Supply stores during the quarter.

Supply of tractors increases the estimated estimate

The company updated its 2024 guidance, raising its earnings per share forecast to $10.10 to $10.40 from the previous range of $10.00 to $10.40, compared with the consensus estimate of $10.29.

It also raised its revenue forecast to $14.85-$15.10 billion, up from $14.80-$15 billion, slightly above the consensus estimate of $14.90 billion.

Tractor Supply stock underwent a 5-for-1 stock split on December 19, 2024. As of January 3, 2025, the stock is trading down 2.1% year-to-date (YTD). The stock’s annual dividend yield is 1.69%. .

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