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Cargill profits jump as US meat markets rally

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Rising meat and ethanol demand in the US, and brisk demand for its products in Asia, helped global commodity giant Cargill record booming profits, despite the continued sluggish performance of its grain trading and processing business.

The privately held company said adjusted operating earnings rose 50% to $715m in the three months to February 28.

Revenue rose 8% year-on-year in the same period, to $27.3bn.

Rising performance in ingredients segment

Cargill's food and ingredient business saw stronger performance, with "in sweeteners globally and plant-based bio-industrials in North America".

"Cocoa and chocolate earnings rose on the strength of the European business, supported by origination in West Africa," Cargill said.

"The segment's Asia-based business rebounded from a challenging year-ago period, lifted by good performance in corn-based starches and sweeteners in China and edible oils in India."

Protein business sees rising demand

Earnings from Cargill's livestock and feed business grew "significantly," thanks to rising meat prices.

"Although below the earnings pace set in the first half, the North American protein business continued to benefit from renewed consumer demand for beef, which pulled more boxed beef and case-ready volume through its supply chain," Cargill said.

"It also realized steady foodservice demand for egg products."

But earnings from feed sales were down year on year, thanks to stiff competition in China and Russia, as well as bird flu and "disruptive or unseasonable weather" in other countries.

And the company's industrial and financial services also rebounded, helped by better market conditions for ocean freight.

Poor South American crush, corn exports

Earnings from Cargill's trading and processing business were down slightly year-on-year.

"Performance in South America trailed the prior year as the business dealt with reduced farmer selling and slowed processing in Argentina due to excess rain, as well as decreased corn exports out of Brazil due to last year's drought," Cargill said.

But earnings from the Asian segment were up year-on-year, thanks to brisk crushing in China, and brisk business for Australian grain.

"The North America-based business remained a large contributor to segment earnings, thanks to steady grain export volumes," Cargill said.

Still, oilseed crush volumes in North America decreased toward the end of the reported season, ahead of the expected big South America harvest.

By William Clarke

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