Cargill, the world’s largest food commodities supplier, reported lower profits in its latest quarter as overflowing crops continued to weigh on its grain trading business.
The family-controlled company’s adjusted operating profit declined 8 per cent year-on-year to $948m in the quarter ended November 30, while net profit fell 6 per cent to $924m. The results suffered in comparison to a strong quarter a year before.
Three of Cargill’s four segments posted higher results. But total profits were dragged lower by its origination and processing segment, where earnings were “down moderately,” the company said.
“Although global demand continues to grow, today’s abundant supplies have weighed on markets, diminishing volatility and trading opportunities,” Cargill said.
Despite the worsening results in the segment, Cargill said performance in North American trading and in Asian oilseed processing was ahead of the same period last year. It noted new work on technologies “that will better connect its global operations, enhance trading analytics and risk management, and increase supply chain sustainability,” as well as investments including construction of a $90m biodiesel plant in Wichita, Kansas, its third such facility in the US.
Cargill’s animal nutrition and protein, food ingredients and applications and industrial and financial services segments all increased profits in the quarter. However, the company’s global poultry business — part of animal nutrition and protein — declined.
As an example of Cargill’s technology initiatives, the company said its turkey business experimented with using blockchain, the electronic ledger, to track birds during the Thanksgiving holiday to provide customers with information about the farms that raised the animals.
Cargill’s revenue was $29.2bn in the quarter, up 8 per cent compared to the same period last year.