Global commodities dealer Cargill reported a 41% plunge in adjusted quarterly gains on Thursday, citing supply interruptions stemming from the U.S.-China trade conflict and also flooding in the central United States that struck marketing and transportation of grains and livestock.
Cargill, the most prominent privately-held U.S. firm, said adjusted operating revenue dropped to $476 million in the fourth quarter ended May 31, from $809 million a year earlier, as three of its four enterprise units posted lower annual outcomes.
Trade spat between Washington and Beijing have damaged the U.S. agricultural sector as tit-for-tat tariffs have reduced commodities exports from America and redrawn international trade flows. Extreme spring flooding throughout the U.S. farm belt added to the struggles.
“It was an off quarter. It wasn’t what we wanted; however, we’re fairly optimistic about where we’re taking the corporate,” David Dines, Cargill’s chief monetary officer, stated in an interview.
“Whenever you combine the climate with the trade conflict, it’s a difficult time for the trade,” he stated.
Minnesota-stationed Cargill is the first of the principal grain merchants to report earnings since U.S.-China trade negotiations broke down and protracted rains led to the slowest U.S. spring planting season on record.
Cargill competitors Archer Daniels Midland and Bunge Ltd report quarterly outcomes at the end of the month.
Cargill’s animal vitamin and protein division posted lower annual revenue for the third time in four quarters as poor climate jeopardized U.S. Midwest cattle shipments and diminished demand for beef for outdoor grilling.
Diminished hog feed demand in China, where a lethal hog disease referred to as African swine fever has infected the trade, further dampened outcomes.