Cargill earnings advance despite drought
by Keith Nunes
MINNEAPOLIS – Cargill net earnings increased to $975 million during the first quarter of 2013, ended Aug. 31. The results are favorable compared to the same period of the previous year when the company’s net earnings were $236 million.
Sales for the quarter were $33.8 billion, down slightly from $34.6 billion in the first quarter of fiscal 2012.
The company said the impact of the drought on its business has been mixed and will continue to be so in the months ahead.
"Now more than ever Cargill is using our knowledge and market insight to help customers manage in this time of tighter supplies, higher prices and more volatile markets," said Greg Page, chairman and chief executive officer. "We are reaching out to customers and tapping the full resources of Cargill to create solutions that address their needs."
The weather has altered the normal distribution of raw materials around the world, and that is pushing more international buyers to non-US origins, according to the company. As a result, Cargill said it expects more atypical trade flows of raw materials. Cargill's North American grain handling volumes for exports are anticipated to be lower than pre-drought expectations, and the company said it may be a challenging year for its animal protein businesses globally.
Notable events that occurred during the first quarter included the acquisition of Evirotemp FR3, a dielectric fluid business and brand from Cooper Power Systems. The company also purchased a ground beef facility in Fort Worth, Texas, from AFA Foods. Cargill is also constructing an animal nutrition facility in South Korea's port of Dangjin, and it announced plans to build a specialty feed facility in Bovina, Texas.