US agribusiness giant Cargill has reported a sharp rise in quarterly profit but warned that earnings in the current quarter would be hit by the impact of the discovery of a case of mad cow disease in the US.
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Cargill posted net earnings of US$518m for the second quarter to 30 November, compared to $314m a year earlier.
Cargill said earnings from continuing operations were $513m, up 62% from a year earlier. Those results included special items of $117m in the latest quarter and $31m a year ago. Excluding those items, operating results increased by 39%, Cargill said.
Among the contributors to the growth in second-quarter earnings were the global grain, oilseed, cocoa, and starch and sweetener businesses. Beef processing and cattle feeding results were strong, though record-high costs for cattle in tight supply tempered beef earnings late in the period, the company said.
Cargill announced earlier this week that its US beef production unit, Excel Corp, has laid off up to 7% of its workforce at five US beef plants in response to lower beef demand caused by the BSE case.
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By GlobalData“We are anticipating modest negative impact in third-quarter earnings, in terms of looking at the impact of the BSE finding and the shutdown of the export market,” Cargill spokeswoman Lisa Clemens told Reuters.
