UPDATE 1-Cargill profit surges as lower grain prices spur demand
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By Karl Plume
Jan 8 (Reuters) - Replenished grain supplies following a bumper North American harvest bolstered global commodities trader Cargill Inc's bottom line in its latest quarter as lower prices lifted demand for crops and padded margins on meat sales.
Privately-held Cargill, based in Minnesota, reported net earnings of $784 million for the second quarter ended Nov. 30, up 41 percent from $556 million a year earlier. Quarterly revenue fell 8 percent to $30.3 billion from $32.9 billion.
Cargill's origination and processing segment and its animal nutrition and protein business gained most from tumbling prices for major crops including corn, soybeans and wheat, all of which hit multi-year lows during the quarter.
"With first-rate performance in our agricultural, animal nutrition and meat businesses, Cargill posted strong results, outpacing recent quarters by a good margin," President and CEO David MacLennan said in a release.
U.S. farmers reaped their largest-ever corn and soybean crops in 2014 while Canadian growers harvested a second consecutive bumper crop, providing domestic processors, livestock producers, biofuel makers and exporters the cheapest raw materials in several years.
Cargill rivals Archer Daniels Midland, Bunge Ltd and Louis Dreyfus Corp, known collectively as the ABCD companies that dominate the global grains trade, are all anticipating a profit bump as grain prices moderate from several years of historically high prices.
Cargill said its Australian beef processing and its U.S. cattle, pork and turkey businesses also generated strong returns. Continued...