Amid heated, divisive rhetoric saturating the first weeks of the Donald J. Trump administration, the U.S. stock market has stood as a uniquely powerful and stable indicator of optimism. Since Mr. Trump was elected, the S.&P.500 index has surged more than 12%.
While failing to match this performance, the Grain-Based Foods Share index, as compiled by Milling & Baking News, has generated impressive results, too. The index has jumped 9% since the beginning of November, compared with a 5% gain by the Vanguard consumer staples exchange traded fund. While the Grain-Based Foods Share index has been holding its own by numerous measures, a closer look suggests an iffier situation for the industry. Of the 27 stocks included in the index since the beginning of November, 20 failed to equal or eclipse the S.&P.500 over the same period. The aggregate 9% advance was sustained by particular strength in a couple handfuls of grain-based stocks – Bunge Ltd.; Flowers Foods, Inc.; Hostess Brands, Inc.; MGP Ingredients Inc.; Panera Bread Co.; Seaboard Corp.; and Snyder’s-Lance Inc. Shares in six of the companies in the index have seen share-price declines since the election.
At one level, the lagging performance of grain-based foods shares is anything but surprising. Given that the index had outperformed the market for eight consecutive years, through 2016, a period of underperformance, perhaps lengthy, was to be expected. Whether food industry executives gain their footing during this period and share prices outperform, the sector seems poised for a strong year.