SUBSCRIBE

Breaking News on Global Meat Trading and Processing

Headlines > Financial

Read more breaking news

 

 

Cargill profit boosted by rising meat demand

Post a comment
Oscar Rousseau

By Oscar Rousseau+

17-Jul-2017

President of Cargill Protein Latin America, Xavier Vargas, was key to Colombian takeover
President of Cargill Protein Latin America, Xavier Vargas, was key to Colombian takeover

Agricultural commodities trader Cargill pulled in some of its best financial results in years, as strong demand for protein lifted earnings.

Net profit increased by 19% year-on-year to $2.84bn in the fiscal year to 31 May 2017, suggesting two years of structural change are paying off at one of the largest privately held companies in the US.

Earnings were up across Cargill’s four segments - meat, food ingredients, grain and oilseeds, and financial services – with animal protein contributing the most to profit upturn across the full year and fourth quarter.
 
Strong consumer demand for retail-ready beef in North America, in the fourth quarter particularly, drove earnings, although Cargill said all meat segments were “lifted by exceptional performance in global protein”.

Growing exports of cooked chicken to Southeast Asia, rising fresh chicken sales in Europe and better-than-expected performance in China saw Cargill’s poultry division post a year-on-year rise in annual earnings.

Lower costs mitigated the impact of unspecified “environmental and market conditions” that dampened animal feed demand in several countries. But combined with an upturn in fourth quarter trading, Cargill’s animal nutrition earnings were slightly ahead of last year.

Restructure paying off

Cargill’s companywide adjusted operating earnings hit over $3bn, up 85% from the year before and the improved returns come as Cargill reshapes its entire portfolio.

The past two years have seen significant work to improve performance and position the company for growth,” said David MacLennan, Cargill’s CEO.

The structural improvements we’ve made, as well as favourable conditions in some markets, have yielded strong results. Although the environment continuously changes, we feel good about our underlying progress. By building a more integrated, focused and agile Cargill, we are creating the momentum for growth and success for our customers and partners.

In just over a year, Cargill has exited the feedlot industry by selling its cattle farms as it aims to invest more energy and resources into meat processing.

This saw the business acquire one of Colombia’s top poultry processors, Pollos El Bucanero , which supplies chicken to retail and foodservice clients.

Foodservice is emerging another key area for the firm: it acquired cooked meats supplier Five Star Customs Food for an undisclosed sum in June 2016 and spent $111m converting its fresh meats factory in Nebraska to a cooked meats facility to supply foodservice customers, such as Taco Bell.

To drive financial performance in fiscal 2018, Cargill said it will explore capabilities in data and analytics to build sustainable supply chains in the 70 countries it operates within.

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products

Related suppliers