As the Russia-Ukraine war continues amid ongoing food shortages, the cost of food in the United States increased by 8.8% in March 2022, according to the U.S. Bureau of Labor Statistics. It is the highest food inflation since May 1981. As a result, food stocks are gaining investors’ attention. This is evident from the Invesco Dynamic Food & Beverage ETF’s (PBJ) 6.5% gains over the past three months compared to the SPDR S&P 500 Trust ETF’s (SPY) 4.4% loss.
The critical reasons for rising food prices are supply chain disruptions, heavy demand for food commodities, and high energy prices. As these factors are expected to keep driving food prices in the near term, the food industry is expected to thrive. According to Valuates Reports, the global packaged food market is expected to grow at a CAGR of 5.2% by 2030.
