Market volatility spurs Cargill profit surge

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Cargill

Cargill has reported a 68 percent surge in profits for the first quarter of 2011 to August 31, on the back of renewed volatility in global agricultural commodity markets, the company said.

The company reported net earnings of $883m for Q1 2011, compared to $525m for the prior year period. Excluding earnings from its majority investment in the fertilizer and feed firm the Mosaic Company, it earned $693m, up 51 percent from $458m a year ago. Revenues for the quarter were up six percent on Q1 2010, to $27.8bn.

Cargill chairman and CEO Greg Page said in a statement: "Cargill posted a strong start to the new fiscal year. Our results were led by the food ingredients and the commodity trading and processing segments, both of which experienced resurgence in volatility across agricultural commodity markets. The change put Cargill's global breadth, trading and risk management skills more acutely into play as we worked with customers to help them manage their price risk and raw material needs."

The company said that its earnings in food ingredients and applications were up moderately from last year, “due to improved performance on a combined basis among the food ingredient and the animal protein businesses”.​ Meanwhile, earnings from origination and processing “rose significantly”​ as market volatility created trading opportunities, Cargill said.

As a private company, Cargill does not publish its full financial results, nor give a detailed breakdown of performance across divisions.

However, the company said that earnings for its risk management and financial segment were down due to “choppy energy markets that often moved out of step with supply-and-demand fundamentals.”​ And earnings were also down in its agricultural services segment, a situation that the company attributed to seasonality in North American farm services and volume pressure in some animal nutrition markets.

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