ADM’s Profit Shrinks on Crop Market Downturn
Archer-Daniels-Midland Co.’s quarterly profit shrank more than expected as the grain trading giant faces a downturn in crop markets.
Chicago-based ADM reported earnings of $1.03 a share for the three-month period ended in June, down 46% from a year earlier, and the lowest since 2020 for the period. That trailed the $1.24 average of analyst estimates compiled by Bloomberg. The company’s shares slid as much as 2.2% in New York before regular trading hours.
ADM ranks No. 74 on the Transport Topics Top 100 list of the largest private fleet operators in North America, and No. 9 on the agriculture sector list.
Crop traders’ profits have been under pressure from ampler supplies of grains and lower prices, reversing the windfalls from previous years after crop losses and trade disruptions sent grain prices to all-time highs. The profits they make from processing soybeans into meal and oil — a key earnings driver — have also eroded.
ADM processed less soybeans than anticipated by analysts in the second quarter.
Slower farmer selling in top soybean producer Brazil and higher logistics costs “led to much lower margins” at its main operation, ADM said in a statement July 30. The company also faced “limited carries and trading opportunities” in North America as increased supply from Brazil and Argentina “shifted export competitiveness to South American origins.”
ADM still kept its full-year earnings forecast at a range between $5.25 to $6.25 a share.
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