Cargill profit drops 43% from record high, documents show

Cargill's annual profit nearly halved in its latest fiscal year amid rising costs, a declining meat business and lower agricultural prices from a fading commodities boom.

The largest privately held U.S. company reported net income of $3.81 billion for the year ended May 31, down from a record $6.69 billion in the prior period, according to documents seen by Bloomberg Opinion columnist Javier Blas. Cargill, which was founded in 1865 in Iowa but now is headquartered near Minneapolis, does not release annual financial statements to the public.

According to the documents seen by Bloomberg, profit was affected by a decline in Cargill's beef business, hurt by the tightest U.S. cattle supplies since 2014, and a chicken glut that eroded earnings. But even with the 43 percent profit drop, it was still the fourth-best year for the crop trader.

Cargill has soybean processing and corn milling operations in Cedar Rapids, and in 2017 acquired Cedar Rapids-based Diamond V, an animal nutrition manufacturer.

Cargill's annual revenue rose 7.1 percent to a record $176.7 billion, the documents show. Yet, a 61 percent jump in interest expenses along with higher restructuring costs, depreciation and other expenses eroded earnings.

The higher costs came just as pandemic restrictions were easing and crop prices stabilized following Russia's 2022 invasion of Ukraine.

With ample supplies weighing on prices for commodities such as corn, soybeans and wheat, crop traders including Bunge and Archer-Daniels-Midland are expected to post annual profits that fall short of record levels seen over the past two years. Still, earnings should remain at historically high levels, according to analysts estimates compiled by Bloomberg.