US agribusiness giant Cargill today (9 October) reported a 41% fall in first-quarter profits due in part to the impact of last year’s severe drought in the US.
The company booked net earnings of US$571m for the three months to the end of August, down from $975m a year earlier, which the firm said had been a “record quarter”.
As a privately-owned company, Cargill does not provided detailed results for its divisions but said earnings from its largest business – origination and processing – were down. Last year’s drought in the US Midwest “reduced grain handling opportunities” ion the quarter.
Profits from food ingredients and applications fell “moderately”, Cargill said.
However, earnings from Cargill’s animal nutrition and protein division increased thanks to improved margins.
Earnings from its industrial and financial services business were down “significantly”, Cargill added.
Group revenues “matched” the $33.8bn recorded in last year’s first quarter.
“Cargill did an excellent job managing the remaining effects of last year’s severe drought and smaller crops,” chairman and CEO Greg Page said. “Our agricultural supply chain and food ingredient businesses were focused on helping customers and the company to successfully manage their raw material purchases and inventories during the market uncertainty that precedes the transition to new crops in the northern hemisphere.”
In December, Page will move to a role of executive chairman after six years as chairman and CEO. Cargill COO David MacLennan will become chief executive.