U.S. agribusiness giant Cargill Inc. on Thursday reported a 36 percent rise in quarterly profit, supported by a bigger U.S. crop harvest in 2013 that led to lower grain prices and improved meat margins.
Minneapolis-based Cargill, a top global commodities trader, reported net earnings of $556 million for the second quarter ended Nov. 30, up from $409 million a year ago.
Revenue totaled $32.9 billion, down 7 percent from a year ago.
“Earnings improved in three of our four segments,” said Cargill’s new CEO David MacLennan, who took over after Greg Page stepped down Dec. 1.
Cargill, the top exporter of U.S. grain and oilseeds, benefited from replenished grain supplies following a bumper U.S. corn and soybean harvest after the 2012 drought, thus boosting export prospects and grain processing volumes as well as improved profits in its meat business.
“The impact on supply and demand caused prices for agricultural commodities to come down from last year’s highs, providing relief to Cargill’s animal nutrition and protein segment,” the company said in a statement. “Larger export volumes and increased operating efficiencies also contributed to stronger results, especially in beef processing.”
Cargill’s meat business was under stress in 2013 from high feed costs that contributed to a 60-year low in the U.S. cattle supply, which cut beef volumes as well as profit margins.
U.S. exports of corn rose 43 percent in the quarter. Bigger stocks of corn – the No. 1 grain exported by the U.S., the world’s top grain exporter – triggered a 40 percent decline in prices, which renewed interest by overseas buyers.
Cargill, one of the world’s largest privately held corporations, had revenue of $136.7 billion for fiscal 2013, which would have placed it No. 10 on the Fortune 500 list of publicly held companies.