Floods and US-China trade war hit Cargill Q4 profits hard

11 Jul 2019 | Andy Allan

Adjusted profit at global agribusiness major Cargill fell 41% in the company’s fiscal fourth quarter as uncertainty over US-China trade and some of the wettest weather in decades across the Midwest hit the company’s Origination and Processing business.

Adjusted profit was $476 million from revenue of $29.9 billion in the three months that ended May 31, down from $809 million in the previous corresponding period, the company said Thursday.

"Throughout the year, we faced a very challenging global business environment that slowed earnings. Still, we improved performance in several food and financial businesses and significantly reduced costs companywide,” said Dave Maclennan, Cargill CEO and chairman.

The company said its originating and processing business – essentially its grain handling and crushing segment – was hit by the “deep uncertainty” around the US trade war with China which has “overridden global supply-and-demand fundamentals and disrupted train flows, especially in corn and oilseeds.”

“Adverse wet weather in the US interior also slowed grain marketing and transportation activities,” the company added.

The fourth quarter figures brought total earnings for the full fiscal year to $2.82 billion, 12% below last year’s figures, from revenues of $113.5 billion.

That gives one of the world’s biggest grain handlers and private companies margins of just 2.48%.