Additionally, strong performance in US turkey and value-added proteins boosted animal nutrition segment earnings close to the year-ago level, reported Cargill.
“They [the animal nutrition teams] work closely with customers to understand their goals, farming and feeding operations, and provide custom-formulated feeds, products and services that deliver measurable results,” a spokesperson for Cargill told us. “This approach has helped lift results in those [the US and Vietnam] and other geographies,” she said.
Cargill also is pleased with the contributions of EWOS, the salmon feed producer it purchased in October 2015, reported the spokesperson. The acquisition added to Cargill’s existing aquaculture business by bringing cold-water species experience, along with production and research and development assets.
Tough environment
Cargill reported an 8% hike in net profit to $459m in its third quarter results, and a 13% jump in adjusted operating earnings to $476m but said Q3 revenues were down 11% to $25.2bn based on lower commodity prices, the sale of Cargill’s pork business and the strength of the US dollar.
Nine-month adjusted operating earnings decreased by 2% to $1.66bn, it noted.
“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 CEO.
Large global stocks in agricultural commodities mean that it is likely prices and volatility will stay low, said MacLennan.
“Barring weather events, we don’t anticipate a near-term improvement in market conditions for agriculture,” he said. “In these kinds of cycles, and we’ve been through them before, we focus on the levers under our control.”
The company is focused on plant efficiency, streamlining efforts and making a more competitive business portfolio, he said.
Beef business, grain handling and crushing results
High-priced feeder cattle in North America and decreased US beef exports, combined with reduced cattle supplies in Australia and lower prices for pork and poultry interacted to bring down adjusted operating earnings for the animal protein segment, reported the agribusiness giant.
The food ingredients and applications segment had positive results after a weak comparative period, reported the company. The origination and processing segment saw its adjusted operating earnings increase from last year even with weak prices in the agricultural commodity markets.
Grain handling and oilseed processing were up in the Americas and there was a contribution from the world trading operations, said the company. Slower corn sales from the US were balanced by increased corn shipments from Argentina.
Market conditions also influenced industrial and financial services, which saw a quarterly loss, it reported. Ocean freight rates were at historic lows and results were curbed for petroleum with an oversupplied crude oil market.