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Cargill Reports Worst Quarter in a Decade [August 9, 2012]

Cargill Profits Below Expectations

By , Farms.com

Cargill, one of the leading international agricultural companies reports Q2 profits fell below expectations. Their March-to-May 2012 period experienced its worse showing in a decade. The news also hits with a drop in full-year profit expectations.

Cargill’s Chief Executive, Greg Page noted that the full-year decline is reflective of the one of the company’s strengths – trading.

"We did not trade as well in this year's markets," a factor reflecting their vulnerability to changes in political factors, such as twists in the eurozone debt crisis, which were difficult to predict rather than crop fundamentals,” says Page.

The news isn’t all doom and gloom for Cargill, demonstrating improved results its food ingredients division which was boosted by starches, specialty oils and cocoa.

"We are confident about Cargill's ability to grow profitably, to help our customers to do the same, and to help build a more food-secure world," says Page.

Cargill has also been weighing into the politics of U.S. ethanol policy, calling for a holdback on corn used for ethanol production in order to free up some corn for livestock producers who are dealing with high input costs with rising feed prices and an overall short supply of feed. The company among other things is a meat processor and is finding itself pinched by high cattle prices and a decreased supply and demand.


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Funds Ditch Ag Commodities, Chase Stocks Amid an End to Middle East War, & Trade Deal Buzz

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The 12-day war between Iran-Israel came to an end sending crude oil futures plunging as the big fund speculators removed the war risk premium.

The weather risk premium in the Ag complex is sending corn, wheat and soybean futures lower on month-end selling ahead of the market moving USDA quarterly grain stocks and acreage reports on June 30th.

Instead, funds were chasing and sending tech stocks higher with the S&P 500/NASDAQ indexes setting new all-time record highs!

June 1 USDA Hogs and pigs report was slightly bearish while the U.S. $ Index traded to new contract lows as the de-dollarization that began in 2014 continues.

Feed in the form of soybean meal futures for livestock producers got cheaper, trading to new contract lows.

The Stats Canada seeded acreage update was bullish canola and wheat.