In this file:
· Meat fuels Cargill's surge in profits
· Earnings rise in all four Cargill segments
Meat fuels Cargill's surge in profits
U.S. beef consumption is up, helping company post huge earnings boost.
By Kristen Leigh Painter, Star Tribune (MN)
July 13, 2017
Cargill Inc. has amassed its largest profit in years thanks to growing demand for meat at home and abroad.
The Minnetonka-based agribusiness on Thursday reported increased earnings across all four of its major business segments for its 2017 fourth quarter and fiscal year, which ended May 31. Chief Executive David MacLennan attributed the strong financial results to a two-year restructuring efforts and favorable market conditions.
“The past two years have seen significant work to improve performance and position the company for growth,” MacLennan said in a release. “The structural improvements we’ve made, as well as favorable conditions in some markets, have yielded strong results.”
Americans are eating more beef after a decade of decline, and for Cargill — one of the world’s four largest beef producers — that means an improved bottom line.
Cargill’s protein business was the biggest contributor to its $2.84 billion profit for the year, a 19 percent increase over 2016 results. Cheaper corn and fuel brought down beef-production costs, which softened retail prices in calendar year 2016. As a result, Americans, on average, ate 55.6 pounds of beef in 2016 — a pound and a half more than in 2015, according to the U.S. Department of Agriculture. Cargill’s 2017 fiscal year began in June 2016 and ended May 2017.
Cargill also tapped into a growing middle class in some of the world’s most populated regions. The company saw growth in beef exports last year and reaped the benefit from its investment in poultry in Southeast Asia. Increased exports of cooked chicken from the region led to higher yearly earnings in poultry.
The company’s egg business also received a boost from stronger demand in the food service channel, which sells to hospitals, universities, schools and other institutions. Europeans bought more fresh chicken and sales of the white meat are improving in China.
But it’s not just meat and eggs that boosted Cargill’s adjusted yearly earnings of $3 billion, an 85 percent improvement over 2016. As the world’s largest commodities trader, Cargill saw improved results in food ingredients across the globe, especially cocoa-, corn- and wheat-based products. Cargill opened two new food innovation centers — one in Shanghai and the other in the Twin Cities...
Earnings rise in all four Cargill segments
by Jeff Gelski, World-Grain.com
July 13, 2017
MINNEAPOLIS, MINNESOTA, U.S. — The second year of an ongoing transition went well for Cargill as all four of its business segments reported an increase in earnings for the fiscal year ended May 31.
“The past two years have seen significant work to improve performance and position the company for growth,” said David MacLennan, chairman and chief executive officer for Minneapolis-based Cargill, when fiscal-year and fourth-quarter results were released July 13. “The structural improvements we’ve made, as well as favorable conditions in some markets, have yielded strong results.”
Adjusted operating earnings for the year were $3.04 billion, up 85% from $1.64 billion in the previous fiscal year. Net earnings on the basis of U.S. generally accepted accounting principles were $2.84 billion, up 19% from the previous year. Revenues increased 2% to $109.7 billion on increased sales of grain, oilseeds and metals.
The Food Ingredients & Applications segment posted improved results across global ingredient portfolios in cocoa as well as corn-based and wheat-based products. The Originating & Processing segment, after suffering a loss in last year’s fourth quarter, responded with a profit in this year’s fourth quarter as slow farmer selling in South America extended U.S. export opportunities. Earnings for the fiscal year exceed those of the previous fiscal year as record U.S. crops were met with demand from global growth in livestock production.
The Animal & Protein segment was the largest contributor to adjusted operating earnings in the fourth quarter and the full year. The protein business in North America continued to see strong consumer demand...