Southern Indiana Supply



National & World Ag News Headlines
ADM Profit Losses Partially Attributed to Trade War
USAgNet - 02/07/2019

U.S. grains trader Archer Daniels Midland Co on Tuesday reported lower-than-expected fourth-quarter 2018 earnings as the U.S.-China trade war roiled global agriculture, sending its shares down more than 6 percent.

According to Reuters, three of its four business units reported lower results, including ADM’s grain trading origination business, where adjusted operating profit slumped 30 percent to $183 million despite higher volumes of North American corn and soybean exports to markets outside of China.

Profits were also hurt by “significant insurance settlements” among ADM’s businesses tied to sorghum shipments in early 2018.

Last April, Reuters reported that several ships carrying cargoes of sorghum, a niche animal feed, from the United States to China changed course after Beijing slapped hefty anti-dumping deposits on U.S. imports.

An anti-dumping probe by Beijing, which halted trade between the world’s biggest buyer and seller of the grain early last year, was among the first fights between the United States and China, which are still embroiled in a trade war.

ADM’s origination unit, which buys grain from farmers, received an intra-company settlement in the quarter from its captive insurance subsidiary related to sorghum shipments intended for China in the first half of 2018, ADM said in a statement to Reuters on Tuesday.

One key bright spot was its oilseeds unit, with quarterly operating profit more than doubling. The unit crushes soybeans and exports beans grown in Brazil and elsewhere.

Crush volumes for the quarter “were among the highest ever,” with oilseeds’ operating profit up almost 80 percent for full-year 2018 from the year earlier, ADM Chief Financial Officer Ray Young told analysts on a conference call.

Crush margins “will not be as spectacular” in 2019, ADM Chief Executive Officer Juan Luciano said on the call, although margins would be above the average from the last five years.

Send this article to a friend


Other National Headlines

Easy Way Cattle Care
Indiana Berry
Copyright © 2019 - USAgNet.com. All Rights Reserved.