Both agri-business giants confirmed reports they have developed an agreement to exchange ownership of a selection of grain elevators and facilities in Illinois and Indiana.
Illinois-based Archer Daniels Midland Company (ADM) is set to sell grain facilities in Beardstown, Naples and Keithsburg, Illinois, a company spokesperson said in a statement provided to us. However, the company will gain sites in Indiana.
Similarly, Minnesota-based Cargill has arranged to sell properties in Mount Vernon and Evansville, Indiana, a company spokesperson told us.
“We regularly evaluate our portfolio to ensure that our businesses and assets best fit our strategy to maximize long-term returns,” the ADM spokesperson said. “Cargill’s Mount Vernon and Evansville, Indiana, elevators are a great fit for our origination network, and will allow us to better serve farmer and customer needs in the region.”
Interest in the exchange also followed Cargill’s ongoing evaluation of its facilities, said the Cargill spokesperson.
“We continually evaluate our assets to ensure they are operating efficiently and fit our strategic growth plan.
“After an in-depth evaluation of our grain assets in this region, we concluded that the transaction will enable us to increase efficiency and better execute our growth strategy,” she said.
The project is currently working through the “due diligence” process, both companies said. However, the transaction is expected to be finished in “coming weeks.”
Financial details about the exchange are not being released at this time.
In addition to reviewing the company's physical assets, Cargill released its fourth-quarter and full-year financial results last Thursday [July 11].
A “challenging global business environment” reduced company earnings, said Dave MacLennan, Cargill chairman and CEO, at the time.
Uncertainty regarding trade between the US and China played a role in the altering trade flows for products including corn and oilseeds, the company said. Domestic transportation of feed ingredients has been challenged by wet weather.
However, Cargill has been continuing efforts to limit company-wide costs and improve internal efficiencies, the company said.
Overall, the company reported a 41% decline in operating earnings, a 67% drop in net earnings on a US GAAP basis and 1% dip in revenues for the fourth quarter of the fiscal year.
For the full-year results, adjusted operating earns fell 12%, net earnings declined 17% and revenues dropped 1% reaching $113.5bn, the company said.
ADM is set to release second-quarter financial results on August 1.
Recent company activity
In addition to developing a facility agreement with Cargill, ADM facilities also have been gaining attention following a fire Monday.
The company had an on-site fire near its Stratus soybean processing facility in Decatur, Illinois, said the ADM spokesperson.
“Employees quickly evacuated the facility and called the Decatur fire department for assistance,” she said. “The fire was contained quickly, and no one was injured.”
The cause of the incident and extent of the damage are still being investigated, she added.
Reports from the Decatur Fire Department that the fire caused and estimated $100,000 in damage have not been confirmed by the company, the spokesperson said.