Cargill which is the biggest privately-owned US company reported a drop in its fourth-quarter earnings as it had to face a challenging global business environment such as the spread of a deadly pig virus, extreme weather events and the fallout of the US trade spat.
The company which is part of a small group of companies which dominate trade in global agricultural commodities reported a record decrease of 44% of its operating earnings that were USD 476 Millions in the three months to the end of May, compared to a year earlier. Taking the entire year’s earnings to USD 2.82 Billions representing a 12% decrease compared to the previous year.
Nevertheless the company’s chairman and chief executive Dave MacLennan said “ Still, we improved performance in several food and financial businesses and significantly reduced cost companywide”.
The strong demand for beef and eggs makes Cargill’s North American protein business one of the best performing units of the company, however the deadly and with no cure African swine fever that affected a massive amount of pigs through China significantly reduced the demand for animal nutrition and affected their dedicated division. Nevertheless, animal nutrition and protein were still the biggest contributor to Cargill’s earnings in the quarter.
The US-China trade spat, having overridden global supply and demand fundamentals and disrupted trade flows, it has negatively impacted Cargill’s business.