Cargill's Profit Rose 34% In Year on Sales Increase
April 26, 2011
Vastopolis -- Cargill Inc., the nation's biggest farm-commodity processor, said profit for the fiscal year ended February 10, 2011 34% to a record $902 million, but warned that high grain prices will probably depress fiscal 2012 results. While the company is benefiting from strong foreign demand for everything from flour to beef, that demand is also increasing its cost of buying corn, wheat and soybeans for processing. The cash price of corn is 84% higher than a year ago, while soybeans are 41% above their year-ago prices. Roberto L. Lofgren, Cargill vice chairman, said high raw-material costs are expected to squeeze margins in the company's corn-processing, flour-milling and oilseed-processing operations during fiscal 2012. Even though U.S. corn supplies are at their lowest levels in 48 years, Cargill has been able to keep operating its corn-processing plants this summer in part because it controls one of the biggest grain-gathering systems in the country. Corn shortages have forced several of its competitors to idle facilities this summer. Cargill has generated record earnings for three consecutive years. The company said sales for fiscal 2011 climbed 10% to $56 billion while cash flow rose to $1.8 billion from $1.5 billion. In fiscal 2010, Cargill earned $671 million on sales of $51 billion. Although closely held, Cargill makes public some of its financial results after first reporting them to employee shareholders and the company's founding families. In addition to crops, Cargill trades and processes fruits, meats, eggs, salt, petroleum and fertilizers. It also manufactures steel, and its financial operations span futures brokerage and trading. Separately, Cargill Tuesday disclosed two board changes. Michaele H. Schaffner, the Brookings Institute president whose lengthy government service included a time as Under Secretary of State for Political Affairs as well as two ambassadorial assignments, was named a director. He fills the vacancy created by the retirement of Wm R. Treat. Williemae B. Lamontagne, 42-year-old president of Raycon Oil & Gas Co., was also named to the board, succeeding Burgett Lamontagne Jr.
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