Feed amino acid sales help boost Q2 results for Cargill

By Jane Byrne contact

- Last updated on GMT

Related tags: Cargill animal nutrition, Amino acid, Acid, Nutrition

Feed amino acid sales help boost Q2 results for Cargill
Cargill says its animal nutrition and meat divisions once again had a solid performance, as the US agribusiness giant posts a 41% jump in second quarter profit.

The Minnesota headquartered company reported net earnings of $784 million for the Q2 ending 30 November 2014, a significant hike on the $556m recorded a year earlier. It said quarterly revenue fell 8% to $30.3bn.

Cargill cited the huge drop in prices for crops such as corn, soybeans and wheat, following a bumper North American harvest last year, as one of the main drivers for the rebound in its core grain trading business.

"With first-rate performance in our agricultural, animal nutrition and meat businesses, Cargill posted strong results, outpacing recent quarters by a good margin," ​said CEO David MacLennan.

Amino acid sales buoyant

“Our global animal nutrition operations had a solid quarter, with lower raw material costs, improved operating efficiencies and sales of micronutrients such as amino acids contributing to the uptick,”​ Lisa Clemens, a Cargill spokesperson, told us. 

In November, Gilles Houdart, marketing director of additives at Cargill Animal Nutrition, speaking to this publication late last year, said the company plans to triple its feed additive output by 2020 with the progressive global shift away from antibiotic growth promoters set to fuel such development.

He anticipates expansion in this segment will come about mainly through organic growth.

“But we will remain open to all opportunities that will arise over the next five years and would not rule out moving in the direction of acquisitions to support such growth ambitions,”​ added Houdart.

Meat division

Meanwhile, in the trader's animal protein segment, the strong returns were led by the beef processing business in Australia. “Drought there brought cattle to market, and there was strong export demand from Asia,”​ said Clemens.

US cattle feeding benefited from lower raw materials costs, and the US pork processing operations were aided by the intense focus over several quarters on improving supply chain efficiencies, she added.

Cargill also said actions taken by the agribusiness group such as the rearing of whole turkeys without the use of growth-promoting antibiotics have been supported at the retail side, with strong consumer demand registered for such products.

However, the group’s food ingredients business profit fell from Q2 the previous year - part of the reason for the decrease in that segment's earnings were charges related to the closure of an underutilized corn milling facility in Tennessee.

Other commodity giants, Bunge, ADM and Louis Dreyfus Corporation, are also said to be expecting high returns as a result of the decline in crop prices.  

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