Minneapolis — Cargill Inc.’s 2014 first-quarter earnings slid 41 percent to $571 million from $975 million in the first quarter of 2013, largely a result of last year’s severe drought and smaller crops, Cargill reports.
Its origination and processing segment was the largest contributor to its first quarter results, even as uncertainty surrounded crop production in the Northern hemisphere, according to Cargill. In North America, last year’s severe drought reduced grain handling opportunities during the quarter.
The second-largest contributor to company earnings, Cargill’s food ingredients and applications division, which includes its cocoa and chocolate business, saw a moderate decrease in earnings. “Segment businesses closely managed the purchase and delivery of raw materials to processing facilities, which decreased the supply chain risks presented by choppy markets and provided for assured supplies to customers,” the company explains.
The industrial and financial services business was down “significantly” from the same quarter in the year prior, Cargill reports, adding: “The segment’s energy businesses posted a weak performance due to the combined effects of mild weather, soft demand and low market volatility.”
Cargill is rumored to be in the final stages of an estimated $2 billion deal to purchase Archer Daniels Midland Co.’s cocoa business, which would make it the world’s second-largest cocoa processor, behind Barry Callebaut AG.