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

Aug 09, 2012

Cargill Profits Below Expectations

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.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.