Cargill Presses Ahead with Capital Projects Despite Sharp Earnings Drop

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Researched by Industrial Info Resources (Sugar Land, Texas)--Food and agricultural commodities trader Cargill (Minneapolis, Minnesota) said Tuesday capital projects were on track in spite of a sharp drop in earnings for the fiscal third quarter.

Cargill reported Tuesday that net earnings for the fiscal third quarter fell 28% to $319 million from the same quarter last year as a result of winter weather-related disruptions to railway service in North America, a trading loss stemming from a price jump in U.S. power markets in January, and the rejection of some U.S. corn shipments to China.

Revenues for the quarter ended February 28 totaled $32 billion, Cargill said, roughly the same as last year. Earnings for the first nine months of the fiscal year fell 21% to $1.45 billion from the same period, while revenues totaled $98.7 billion.

Harsh weather this winter has impacted rail grain shipments in both the U.S. and Canada.

For related information see April 4, 2014, article-Canada Copes with Grain Rail Backlog Fiasco and March 20, 2014, article-Mother Nature, Crude Oil, Grain and Ethanol Clog Rail Transportation in U.S. Midwest dated March 20, 2014

However, the company said in a press release its capital investment program for fiscal 2014 was "on track." The company said it celebrated the grand opening of its new corn wet mill in Castro, in Brazil's southern state of Paraná, in February.

Industrial Info is tracking more than $600 million in food and beverage-related projects by Cargill, including its corn processing and sweetener plant expansion project in Castro, Brazil. The project, which has a total investment value of nearly $22 million, will expand the plant's production capacity to 500,000 tons per year from 380,000 tons per year. Project completion is scheduled for December 2014.

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