Cargill made its best start to a financial year since 2012, fuelled by the boost to beef packing margins from weaker cattle prices, which remain near their lowest in six years.
The US-based group – with Archer Daniels Midland, Bunge and Louis Dreyfus once of the "ABCD" of agricultural trading giants – unveiled earnings of $852m for the June-to-August period, the first quarter of its financial year.
The result, a rise of 66% year on year, was the highest for the period since the same period of 2012, and reflected, besides contributions from acquired companies, increased profits at its animal nutrition and protein division, which covers markets from livestock feed to meat processing.
This division "was the largely contributor" to underlying group profits, "with results up sharply from the prior year", Cargill said.
The businesses' growth was down in part to the poultry business, which tapped into expansion in the world broiler market - which will in 2017 grow for a 28th successive year, according to US Department of Agriculture data.
However, Cargill said the "profitability as led by the segment's beef business, which benefited from the North American market's ongoing transition to increased cattle supplies, as well as renewed consumer demand for beef".
Indeed, Chicago live cattle futures have continued to feel pressure from raised supplies of fattened animals coming to slaughter, driving October futures to 97.35 cents a pound on Monday, the lowest for a spot contract since late 2010 – and supporting profits for meat processors which buy the animals.
Paragon Economics and Steiner Consulting last month said that packer margins on steers and heifers "this year could easily surpass 2015's level by more than 30%, and set a new 20-year high beef packer margin".
Last year's margin was the third ranked in the last two decades, behind only those of 2003 and 2006.
Cargill also reported that earnings grew "moderately" in the important origination and processing business, spurred by the boost to soybean crushing margins from weaker prices of the oilseed.
However, earnings in cocoa and chocolate, part of the group's food ingredients division, "were restrained by this season's shortage of mid-crop cocoa beans in Ghana", a hangover from an unusually severe iteration of the dry Harmattan wind early in 2016.
Still, David MacLennan, the Cargill chairman and chief executive, said that the group had posted a "strong" start to its financial year.
"We've been charting a new path to higher performance," through measures such as improved plant and supply chain efficiency, "and it's rewarding to see the many changes we've made resulting in gains across much of the company."
By Mike Verdin