Cargill revenue pulled down by falling beef exports
Earnings in its Animal Nutrition and Protein division decreased in the third quarter, due to volatility in the global beef market. Drought-hit cattle supplies in Australia, falling beef exports due to the strong US dollar, coupled with cheaper pork and poultry options at retail level all worked to hold results below last year’s levels.
Overall, Cargill’s third-quarter revenues fell by 11% to $25.2bn reflecting the strength of the US dollar against other currencies, as well as the sale of its pork business to JBS in July 2015. In total, the company reported revenues of $80bn for the nine months to 29 February 2016.
Improvement not expected
“With agriculture and energy markets as tough as we’ve seen in a long time, we’re pleased with the gain in earnings achieved this quarter,” said David MacLennan, Cargill’s chairman and chief executive officer.
MacLennan also said volatility in agricultural commodities remained low, as a number of harvests had built up global stocks. “Barring weather events, we don’t anticipate a near-term improvement in market conditions for agriculture. In these kinds of cycles – and we’ve been through them before – we focus on the levers under our control.”
Other highlights in Cargill’s financial report include an overall rise in adjusted operating earnings. Cargill reported a surge of 13% to $47m in Q3, compared with just $421m when held against data from the same period last year.
Cargill’s nine-month adjusted operating earnings fell by 2% to $1.66bn.
MacLennan also said the company was focused on making the business a more streamlined organisation that was more competitive and efficiently run. “The work we’ve undertaken this year is positioning us to better serve the changing needs of our customers and fulfil our purpose to nourish the world’s people.”
