KANSAS CITY — Since the start of the coronavirus (COVID-19) outbreak, it has been clear that many parts of the grain-based foods sector generally were in a highly fortunate position relative to numerous segments of the US economy. In addition to obvious areas decimated by the effects of the pandemic such as travel, foodservice and entertainment, sectors such as clothing and automotive have suffered, too.
Increasingly, though, it is clear that many companies with large grain-based operations have relatively advantaged positions, even within the food business. Several companies in the Grain-based Foods Share Index have reached 52-week highs in recent days, and 10 of the companies included in the index have scored double-digit share-price gains since the end of February. These top performers include large consumer packaged foods companies such as Campbell Soup Co., up 12%; Conagra Brands, Inc., up 27%; General Mills, Inc., up 14%; The Kraft Heinz Co., up 17%; and The J.M. Smucker Co., up 14%.
To be sure, improved business has not spread uniformly through the industry. Large grain and processing companies such as Archer Daniels Midland Co. and Bunge Ltd. have been under pressure over the past seven weeks. Many grain-based companies have been hurt by the collapse of the foodservice sector. Still, grain-based foods companies have generally proven highly resilient. There is no doubt industry executives have many areas of concern on their minds as they go to sleep at night, but the sector’s strong position in the injured economy also should be cause for considerable comfort.