USA – Global commodities trader, Cargill posted revenues of US$29 billion in the first quarter ending August 31, representing 1% increase from corresponding period last year citing strong protein demand.
During the period, the company’s adjusted operating earnings rose 3% to US$908 million while net earnings declined 10% to US$915 million.
While adjusted operating earnings rose it Animal Nutrition & Protein and Industrial & Financial Services business, Cargil record a decline in its Origination & Processing and Food Ingredients & Applications.
Its North American beef business contributed significantly to the performance boosted by domestic demand for beef and egg products in addition to demand for poultry in China, Thailand and the United Kingdom, which further boosted the results.
“Our year started on a good note as we continued to help our customers navigate an unpredictable business environment,” said David W. MacLennan, chairman and chief executive officer of Cargill.
The company’s Food Ingredients & Applications units however registered lower results with a softening starches, sweeteners and texturizers business primarily due to lower volumes in Europe and North America.
Despite African swine fever leading to the loss of more than a third of China’s hogs, Cargill reported improved results from its animal feed business, partly due to strong sales to fish farms.
Cargill said that the business combined its advantageous product mix with effective cost management to cushion its from ASF outbreak. The company shuttered animal-feed mills in China in recent months, in part because of reduced feed demand.
The Minessota based company however warned of long-lasting changes for the global food business, as the U.S.-China trade dispute stretches into its second year.
Changes in animal nutrition business
Cargill has also announced that it is reorganizing its animal nutrition business in response to growing concerns about animal health and wellness.
Cargill’s animal nutrition and health group will now consist of three units: Cargill Animal Nutrition, combining its existing feed, nutrition and pre-mix businesses; Cargill Aqua Nutrition; and the new Cargill Health Technologies.
Chuck Warta, currently president of Cargill’s animal nutrition and pre-mix business, will head up the new Cargill Health Technologies unit focusing on digestive health and immunology for farm animals.
Adriano Marcon, president and group leader for Cargill’s aquaculture business globally, will lead Cargill Animal Nutrition while Pilar Cruz, president of its compound feed business, will head up Cargill Aqua Nutrition.
“The animal protein market is evolving, and consumer focus on animal health and well-being is becoming increasingly important,” David Webster, head of Cargill Animal Nutrition and Health, said in a statement
“It’s a key area for growth, and we intend to better serve customers in this rapidly evolving market.”