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·         Cargill sees 61% increase in 2Q profits after shifting business to offset disruptions

·         Grain trader Cargill's second-quarter profits jump as global meat demand rises



Cargill sees 61% increase in 2Q profits after shifting business to offset disruptions

The Minnetonka-based agribusiness giant adjusted global meat and grain flows to offset trade and pork-supply disruptions reports and also divested two businesses.


By Kristen Leigh Painter, Star Tribune (MN)

January 7, 2020


While Cargill Inc. continues to grapple with ongoing trade uncertainties that are hitting its North America growers particularly hard, the company is large enough it has been able to adjust its global commodities to minimize the impact to its bottom line.


The Minnetonka-based company’s size and geographic reach, along with the sale of two of its businesses, resulted in a plump profit of $1.19 billion, up 61% from a year ago, for Cargill’s fiscal 2020 second quarter, ended Nov. 30.


Cargill is the largest private company in America and isn’t required to disclose detailed financial information.


The company divested its malt business and financial subsidiary CarVal Investors this fall, making a significant contribution to its net earnings. Meanwhile, Cargill is growing its investment in animal nutrition with the long-term vision of finding natural alternatives to antibiotic use and medical interventions through dietary technologies.


“We saw very good execution from our global teams throughout the quarter, as they focused on delivering what matters for our customers,” Dave MacLennan, Cargill’s chief executive, said in a release Tuesday morning. “Our ongoing transformation, as well as recent acquisitions and expanded capabilities, are all helping us continue to raise our performance.”


As one of the world’s largest agribusinesses, Cargill was able to shift its global protein flows on a by-country basis to respond to changing demands for various meats caused by the African swine fever outbreak that has devastated China’s hog population.


Similarly, as North American farmers have dealt with a slowdown in their grain exports in the face of trade turmoil, Cargill’s far-reaching presence gives the commodity trader flexibility to shift its supply-demand flows to other regions. Still, the company’s grain trading business...


... Its animal nutrition and protein business continued its steady and successful march, increasing quarterly earnings. The fourth reporting segment, industrial and financial services, also grew during the quarter in part due the company’s ocean shipping business. On Jan. 1, new global standards for lower-sulfur fuels went into effect. Cargill said...





Grain trader Cargill's second-quarter profits jump as global meat demand rises


By P.J. Huffstutter and Arunima Kumar, Reuters

via Yahoo Finance - January 7, 2020


CHICAGO/BENGALURU (Reuters) - Commodities trader Cargill Inc [CARG.UL] on Tuesday posted a quarterly profit rise of more than 19%, as the animal nutrition and protein business unit tapped into rising global demand for meat untainted by the spread of African swine fever in Asia.


Cargill said it was prepared for the changing demand patterns and the shift in global protein flows caused by the disease that has killed up to half of China’s hog herd since August 2018 and pushed Chinese pork prices to record highs.


The global markets for pork, beef and chicken have been reshaped as China has been scouring the world for new sources of meat.


The largest privately held U.S. company by revenue has seen both plant- and animal-based protein as crucial to its success in recent years. Cargill and other agricultural companies have been hit by a sour farm economy, adverse weather and the U.S.-China trade war.


Those strains are still being felt. Cargill said some of its regional origination and processing businesses, particularly in North America, were hurt by trade uncertainty and weather disruptions.


Cargill said adjusted operating earnings rose to $1.02 billion in the second-quarter ended Nov. 30, from $853 million a year earlier.


Net earnings rose 61% to $1.19 billion from $741 million a year earlier.


Minnesota-based Cargill's quarterly revenue rose 4% to $29.2 billion.


Dave MacLennan, chairman and chief executive officer, said Cargill's financial performance also got a boost from ongoing restructuring, including the divestment of its malt business and financial subsidiary CarVal Investors.


Other global grain traders have also been trying to shed poor-performing assets and invest in businesses with the potential for higher profit margins, such as specialty ingredients or meat production.


Rival Archer Daniels Midland Co <ADM.N> sold...