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ADM expects to lose millions due to extreme weather

Company says challenges and disruptions to cost it $50-60 million during first quarter.

Extreme winter weather is expected to affect Archer Daniels Midland Co.’s (ADM) North American operations to the tune of $50-60 million in the first quarter, the company said Monday, adding that the impact will be roughly equal between Carbohydrate Solutions and Origination, with some minor impacts to its other segments.

According to ADM, the powerful snow and rain storms that hit early in March resulted in flooding that affected its Carbohydrates Solutions and Origination operations. The company’s corn processing complex in Columbus, Neb., was also idled due to flooding and is currently running at reduced rates.

“Earlier in the quarter, severe cold temperatures and snowstorms affected some of our Carbohydrate Solutions processing facilities in the Midwest,” ADM said. “The extreme weather reduced corn processing volumes principally due to a slowdown in rail and truck transportation, which affected both inbound and outbound shipments.”

ADM added that rail transportation has been disrupted throughout the region and that unfavorable river conditions since December are severely limiting barge transportation movements and port activities.

The company said it continues to assess the situation and is utilizing its transportation and operating network as much as possible to meet customer needs. Further updates will be provided on its first-quarter 2019 earnings call, with an assessment of full-year impacts, including recoveries and offsets, ADM said.

“This is a difficult time for many communities in which we operate. Last week, we announced a $100,000 donation to the American Red Cross to provide disaster relief in areas affected by the recent flooding. The safety and well-being of the people in the affected areas is always our top priority, and we will continue to work directly as well as through third parties to assist people and communities that have been affected by severe weather,” the company said.

TAGS: Business
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