Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Cargill grain elevators in East St. Louis.

JAMES A. FINLEY/The Associated Press

Cargill Inc., the world's largest agricultural merchant, ended a difficult fiscal year with sharply lower quarterly profit, losing money in cotton and sugar and acknowledging missteps at a trading operation renowned for its global knowhow.

Net profit in the fourth quarter ended May 31 was $73-million (U.S.), down 82 per cent from $404-million in the same period last year.

In its fiscal year Cargill earned $1.17-billion, the smallest net profit since 2003. The annual profit was 56 per cent lower than the record $2.69-billion reported in 2011.

Story continues below advertisement

Results excluded previous contributions from Mosaic, the fertiliser company in which Cargill had a 64 per cent stake until splitting it off in May 2011.

Cargill encountered problems in both specialised commodities and global markets through the year. As owner of one of the world's biggest cotton merchants, it lost money trading the fibre as demand softened. Cargill also lost money in sugar and replaced its head of the business last year.

As surging cattle markets outpaced wholesale meat prices, profit margins were squeezed at Cargill's U.S. slaughterhouses. An extremely warm US winter slowed sales of highway salt.

Macroeconomic uncertainties including fears over the eurozone economy also apparently tripped up the company, which has about 139,000 employees in 65 countries.

"Cargill's global market analysis of supply and demand, and our trading expertise are longstanding strengths," said Greg Page, chief executive. "Even so, we did not trade as well in this year's markets, which were driven as much by the economic and political environment as by the fundamentals."

The company has entered its new fiscal year as corn and soyabean prices have surged to records on fear the worst US drought in half a century will dramatically reduce crops. Cargill will be exposed to any shortfall, as it owns an extensive network of grain storage and milling operations across North America.

In the past fiscal year Cargill also made its most expensive acquisition ever, buying animal feed and nutrition company Provimi for $2bn. The company said integration was "proceeding smoothly".

Story continues below advertisement

As grain markets tighten, Mr Page has said the US needs to revisit biofuels policies, which help funnel almost 40 per cent of the US corn crop into ethanol. Cargill operates two ethanol plants in the US.

Cargill's annual revenues totalled $133.9-billion, up 12 per cent from $119.5-billion in 2011. Fourth-quarter revenues of $34-billion were 2 per cent lower than the same quarter a year ago.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies