Thursday, August 11, 2011

Big Ag: Cargill Earnings Decline for First Time Since 2008, Blame Energy Trading

I've had a recurring nightmare since the 2008 oil spike, based on the old John Kennedy joke about Washington D.C. being "A city of southern efficiency and northern charm".
If Cargill and, say, Vitol or Trafigura were to merge, with one of the oil guys taking over Big-C's energy trading, they would own the world within ten years.
From Reuters Africa:
March-May volatile energy and financial markets weigh
* Cargill Q4 revenue rose 32 percent
* Full-year earnings $2.69 billion, up 35 percent
* Full-year revenues $119.5 billion, up 18 percent (Adds byline, CFO comments, background)
By Christine Stebbins
CHICAGO, Aug 9 (Reuters) - Giant U.S. agribusiness and trading firm Cargill Inc [CARG.UL] said earnings fell 7 percent in its fiscal fourth quarter, hit by volatile energy markets and weaker risk management and food ingredient results.

Minneapolis-based Cargill, one of the world's largest privately held corporations, reported $404 million in earnings from continuing operations in the quarter ended on May 31, compared with $435 million a year earlier.

But Cargill, a top U.S. grain exporter, biofuels producer, food processor and energy trader, also reported fourth-quarter revenue rose 32 percent to $34.8 billion.

"The past year presented a challenging operating environment," Cargill CEO Greg Page said in a statement. "From weather-related supply shocks in food commodities, grain export restrictions and rising energy prices to the uneven global economic recovery, looming sovereign debts and deficits, political unrest and natural disasters -- the uncertainty led to volatile prices across a range of raw materials."...MORE