Commodities trader Cargill Inc reported a 41% slump in adjusted quarterly profit on Thursday, citing supply disruptions stemming from the US-China trade war and also flooding in the central United States that hit marketing and transportation of grains.
The privately held company's adjusted operating profit fell to $476 million in the fourth quarter ended 31 May from $809 million a year earlier.
The Minnesota-based food commodities firm, the largest privately held US company, said three of its four business units posted lower year-on-year results.
'Challenging Business Environment'
"Throughout the year, we faced a very challenging global business environment that slowed earnings," CEO Dave MacLennan said in a news release.
Trade tensions between Washington and Beijing have battered the US agricultural sector as tit-for-tat tariffs have reduced commodities exports from the United States and redrawn global trade flows. Severe spring flooding across the US farm belt added to the struggles.
Cargill's animal nutrition and protein segment posted a lower year-on-year profit for the third time in four quarters as poor weather disrupted US Midwest cattle shipments and reduced demand for beef for outdoor grilling.
Reduced hog feed demand in China, where a deadly hog disease called African swine fever has decimated the industry, further dampened results, Cargill said.
Impact Of Floods
Profit for Cargill's origination and processing business fell from an exceptionally strong fourth quarter last year as flooding across the central United States disrupted grain transportation and exports.
River flooding halted grain barge shipments from a large swathe of the Midwest farm belt this spring, forcing exporters to tap costlier rail shipments to meet their export commitments.
US-China Trade War
Also, US farm product exports faced stiff headwinds as tariffs on US goods imported by China, the world's top soybean buyer and major importer of various other agricultural goods, remain in place.
Lower sweeteners and starches profits weighed on Cargill's food ingredients and applications unit in the quarter.
The company's industrial and financial services segment posted stronger quarterly earnings, led by improved profit in metals, risk management and trade finance.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
