Agricultural Supply Chain

The following basket contains three companies that create the whole agricultural chain: Archer-Daniels-Midland processes, stores, transports crop; Mosaic is the global giant in phosphate and potash fertilizers; Paccar Inc manufactures heavy-duty trucks that are used to transport bulk agricultural goods, grains, and raw fertilizers. All three companies could be considered leaders in their specific niche. Additionally, all three have already published financial results for the previous quarter hence earnings volatility is absent.

It should be mentioned that agricultural companies were chosen specially as we expect El Niño climate phenomenon that will start later in autumn and end in spring. El Niño will cause severe storms and droughts which will make countries reduce provision stock (wheat, corn, barley etc). Therefore, after El Niño countries will have to restore the stock making commodities price go up. Assume that our three companies will be beneficiaries of this.

PACCAR Inc. [Internal score 67/100] is one of the world’s largest manufacturers of premium heavy- and mediumduty trucks. Business is divided into the following segments: Trucks and parts production and Financial Services. Company’s trucks are used in various industries. Almost every cargo that is moved by land is moved by the Paccar trucks. PACCAR’s Kenworth and Peterbilt semi-trucks are used to move raw fertilizer minerals from mines to mixing plants and harvested grains from farms to ADM elevators.

According to the financial report for the 2nd quarter of 2026 revenue increased 0.5% y-o-y and amounted to $7.5B. EBITDA margin for the quarter was around 13% level. Net income exceeds $750 mln vs $724 mln for the same quarter in 2025. Company is able to generate positive FCF, which is 4% of the revenue. Current FCF level is $309 mln.

Mosaic [Internal score 77/100] is an American agrochemical giant, one of the world’s largest producers of concentrated phosphate and potash fertilizers. Mosaic plays a key role in global food security by providing soil nutrients for the cultivation of major crops (corn, soybeans, wheat, and rice). Phosphates sales generate 50% of the revenue, Potash almost 30% and Mosaic Fertilizantes – 20%.

According to the recent financial report, for the past quarter of 2026 revenue decreased 6% y-o-y and amounted to $2.8 mln. EBITDA margin for the quarter was around 10% level. For the last quarter company demonstrated net loss equal to $19 mln vs $265 mln net income for the same quarter in 2025. For the next quarter it is expected that revenue will be $3.1B and net income will turn $25 mln.

Archer-Daniels-Midland Company [Internal score 67/100] is one of the world’s largest agribusiness giants and agricultural processors. ADM connects farmers and end consumers, handling the procurement, transportation, processing, and logistics of grains, oilseeds, and food products worldwide. ADM connects farmers and end consumers, handling the procurement, transportation, processing, and logistics of grains, oilseeds, and food products worldwide. Agro Services & Oilseeds generate 60% of the revenue, segments that generate the rest of sales are Carbohydrate Solutions and Nutrition.

In the recent financial report for the past quarter of 2026 company’s revenue increased 7.2% y-o-y and amounted to $22.7B. EBITDA margin for the quarter exceeded 5% level. Net income was greater than $870 mln vs $414 mln for the same quarter in 2025. Company is able to generate positive FCF which is 4% of the revenue. Current FCF level is $877 mln.

The timing is supported by several catalysts that are active now. El Niño is strengthening, with NOAA putting the chance of a very strong event this autumn and winter above 90%, while USDA already projects US wheat stocks about 22% lower year on year and Black Sea disruption is adding pressure to grain trade. At the same time, Class 8 truck demand has rebounded as freight rates improve and fleets replace ageing equipment, giving PACCAR a separate near-term driver.