The commodity boom has not harmed Cargill. The company is heading for its most profitable year ever in its 156-year existence.
Cargill stopped publishing its results in 2020, but with the company issuing bonds next week, it's giving it a look in the books. In the first nine months of the broken fiscal year, the company earned $4,3 billion, Bloomberg reports. That figure is already above the best annual profit. EBITDA rose to more than $7,1 billion during the first nine months of the fiscal year. Credit rating agencies expect the year-on-year increase to be 30%.
Unprecedented demand for maize from China
The credit rating agencies point to two main drivers of the profit increase: strong beef processing margins and unprecedented demand for corn in China. Cargill saw tremendous growth in its traditional grain and oilseeds business due to high demand.
Cargill is also one of the largest meat processors in the United States. Many American slaughterhouses had to close at the start of the corona crisis due to infections among the staff, but Cargill managed to keep the production locations open.
Deployed on demand for proteins
Since taking office as CEO in 2013, CEO David MacLennan has sold the underperforming companies and bet on protein demand, including beef, chicken and fish.
The agricultural markets have risen to astronomical heights due to the rising demand for meat, corn and soybeans. Commodities trading has benefited significantly from volatile markets over the past year. But as well as higher profits, so does the prospect of food inflation at a time when supply chains are stalling and the world grapples with a hunger crisis, Bloomberg said.
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