Cargill recently reported financial results for the fiscal 2017 third quarter and nine months ended Feb. 28, 2017. Adjusted operating earnings were $715 million in the third quarter, up 50% from $476 million in the year-ago period. Nine-month earnings totaled $2.58 billion, a 55% increase over last year’s $1.66 billion.

Net earnings for the quarter on a U.S. generally accepted accounting practices (GAAP) basis were $650 million, up 42% from last year’s $459 million. Nine-month net earnings were $2.49 billion, a 5% increase year-on-year. In the prior-year period, the company said it realized large gains from business divestitures, which were excluded from adjusted operating earnings. Third-quarter revenues rose 8% to $27.3 billion, for year-to-date revenues of $81.4 billion.

“We had strong results this quarter across our segments -- evidence that we are on the right path forward,” Cargill chairman and chief executive officer David MacLennan said, citing gains in food ingredients, animal protein and industrials, as well as the progress of teams around the company to bring customers the full benefits of what Cargill has to offer. “All 150,000 people who work here are focused on executing at a high level as we serve our markets in an integrated way. We are eager to keep pursuing the opportunities that we are seeing.”

Segment results

With strong improvement over last year, Cargill said the Food Ingredients & Applications segment was the largest contributor to adjusted operating earnings in the third quarter, with gains in sweeteners globally and plant-based bio-industrials in North America. A favorable product mix in salts for food applications also boosted results in North America, as did seasonal sales volume in deicing products. Cocoa and chocolate earnings rose on the strength of the European business, supported by origination in West Africa. The segment’s Asia-based business rebounded from a challenging year-ago period, lifted by good performance in corn-based starches and sweeteners in China and edible oils in India.

Earnings in Animal Nutrition & Protein rose significantly, lifted by strong performance in animal protein against a weak comparative period, the company noted.

“Although below the earnings pace set in the first half, the North American protein business continued to benefit from renewed consumer demand for beef, which pulled more boxed beef and case-ready volume through its supply chain,” the company said.

There was also steady foodservice demand for egg products. The poultry business gave protein results an additional boost, with higher cooked chicken exports out of Southeast Asia and improved processing yields and fresh chicken sales in Europe. Elsewhere in the segment, third-quarter earnings in global animal nutrition were below the year-ago level. Despite good performance in bulk feeds and premix products in India, Vietnam and other countries, Cargill said sales volume softened due to competitive pressure in China and Russia, an avian influenza outbreak in Korea and disruptive or unseasonable weather in other countries.

Origination & Processing earnings slightly lagged behind last year’s third quarter. The North America-based business remained a large contributor to segment earnings, thanks to steady grain export volumes; oilseed crush volume decreased late in the period as South America approached harvest season. Performance in South America trailed the prior year as the business dealt with reduced farmer selling and slowed processing in Argentina due to excess rain, as well as decreased corn exports out of Brazil due to last year’s drought. In contrast, segment earnings rose substantially in the Asian Pacific, boosted by soybean crush activities in China and grain origination and trading in Australia.

Cargill agreed to sell its 40% share in Allied Mills Australia -- a flour milling joint venture -- to Pacific Equity Partners, a Sydney, Australia-based private equity firm with investments in the bakery sector. With regulatory approvals in Australia received, the sale is expected to close early in the fourth quarter. Cargill said it remains committed to the food and agriculture sector in Australia, where it has played an important role since 1967.

Industrial & Financial Services put up a strong third quarter against a weak comparative period. Ocean transportation earnings rose sharply, aided by better market conditions in ocean freight, as well as in the mining and steel industries, Cargill said. Returns from asset management activities added to the segment’s improved performance. The energy businesses also contributed to the rebound.

Early in the fourth quarter, Cargill agreed to sell its petroleum trading business to Australia’s Macquarie Group, a global financial services provider based in Sydney. Pending regulatory review, the sale is expected to be completed in Cargill’s fiscal 2018 first quarter.

Broad and positive impact

Cargill said it continues to work with its partners to nourish the world and protect the planet. The company released its first "Report on Forests," marking an important step in its drive to end deforestation in its agricultural supply chains. The report details how Cargill worked with partner World Resources Institute to establish a baseline for measuring future changes in tree cover. The baseline incorporated a cross-commodity approach to mapping the sourcing areas for almost 2,000 Cargill locations across 14 countries. To do so, Cargill and WRI used Global Forest Watch, a cutting-edge tool that monitors forest cover via satellite.

“Although ending deforestation globally is complex, requiring both ambition and pragmatism from a diverse coalition of partners, Cargill is firm in its commitment to do its part,” the company stated.

To advance food and nutrition security, Cargill renewed its partnership with Feeding America, the largest hunger-relief organization in the U.S. A new three-year, $3 million grant will provide children and families with greater access to fruits and vegetables, nutrition education and diabetes prevention solutions. Cargill funding also will support food safety measures to ensure the highest quality of food distribution, as well as efforts to reduce food waste. Feeding America serves 46 million Americans with 4 billion meals each year; Cargill has supported the organization for 30 years.

In March, Cargill announced a three-year, $7 million extension of its longstanding partnership with CARE, a leading humanitarian organization fighting global poverty that places special emphasis on empowering women and girls. The partnership – which has improved the lives of 300,000 people in seven countries since 2013 – will focus efforts on strengthening rural agricultural communities by improving farmer productivity and livelihoods, market access, food and nutrition security, and community governance and education.

“Our purpose is to nourish the world in a safe, responsible and sustainable way,” MacLennan said. “We are proud of the broad and positive impact that arises from the combination of the work we do every day, our partnerships and contributions, and volunteering in our communities.”