Cargill reports lower profit, revenue

Cargill, with three grain processing plants in Cedar Rapids, on Tuesday reported its quarterly earnings fell as global grain and oilseed prices tumbled in anticipation of a record U.S. harvest.

Minneapolis-based Cargill reported net earnings of $425 million in the fiscal first quarter that ended Aug. 31, down 26 percent from $571 million in the same quarter a year earlier. Revenue fell nearly 2 percent to $33.3 billion, from $33.8 billion a year earlier.

Returns from Cargill's origination and processing business, its largest segment, slipped as farmers held back grain sales amid tumbling prices and the lower commodity markets volatility made it difficult to generate trading profits.

Benchmark corn futures prices tumbled 23 percent in the quarter and soybean prices fell 27 percent in the quarter as largely ideal crop weather in the United States fueled expectations for a record harvest.

Cargill said it was poised to benefit from replenished grain supplies as the harvest advances in its second quarter and as lower grain prices attract demand.

'This year's big crops, not just in North America but across agricultural production areas worldwide, will enhance food security after several years of weather disruptions,” said David MacLennan, president and CEO. 'Our company is well positioned to connect these new supplies to growing demand.”

Cargill blamed lower profits in its food and ingredients business on weak economic conditions in several countries, but said strong demand for corn-based biofuel ethanol supported its North American processing operations.