Cargill earnings up 83 percent

Cattle Market & Farm Reports, Editorials
Dec 20, 2007
by WLJ
October 22, 2007

U.S. agribusiness Cargill Inc. last Monday said first-quarter net earnings rose 83 percent, led by its origination and processing segment which processes, markets and distributes agricultural commodities.

Minneapolis, MN-based Cargill, which provides food, agricultural and trading services, said net earnings in the quarter ended Aug. 31 rose to $917 million from $500 million a year earlier.

The results marked the first quarter with Greg Page as chief executive of the second-largest privately held U.S. company. Page took over as Cargill CEO on June 1, replacing Warren Staley who retired as chairman on Sept. 11. Page has also assumed that position.
“June through August was an extraordinary period with growing demand for agricultural commodities against tightening supplies and a long-anticipated but dramatic reduction in liquidity and leverage in financial markets,” Page said in a statement.

Cargill’s food ingredients and applications and industrial segments also outperformed last year’s earnings.

Results at the agricultural services segment were slightly ahead of year-ago figures while results at the risk-management and financial segment were below year-ago levels. The risk-management and financial segment includes some of Cargill’s energy and financial activities.

Grain prices soared during the quarter, led by wheat which hit an all-time high of $9.61-3/4 per bushel on the Chicago Board of Trade, the benchmark for world grain prices. At the same time, global financial markets gyrated from troubles stemming from the U.S. subprime mortgage sector as defaults rose.

During the first quarter, Cargill began purchasing the remaining shares of Agrograin, a Hungarian grain company in which it bought a minority interest and formed a joint venture in 1995.

Cargill also announced plans to double the capacity of its canola processing plant in Clavet, Saskatchewan, to capitalize on strong U.S. demand for healthier cooking oil.