HomeAg NewsProfit Downturn Across the Ag Industry

Profit Downturn Across the Ag Industry

Global bumper harvests, a downturn in crop markets, and slowing demand for farm equipment are shrinking profits and lowering the future outlooks for some of the world’s biggest companies throughout agriculture.

St. Louis-based Bunge posted earnings of $1.73 a share in the second quarter, the lowest since the start of COVID-19 in 2020. The results also missed analyst expectations by as much as ten percent.

Greg Heckman, Bunge’s Chief Executive Officer, commented, “Current market conditions have improved in some regions, but we continue to have limited visibility into the latter part of the year. The drivers of long-term demand remain strong and with our global footprint and operating flexibility, we are well-positioned to connect farmers to consumers to deliver essential food, feed and fuel to the world.”

Global grain merchant ADM shares dropped two percent after the company missed Wall Street expectations for second-quarter profits, which were hit by lower soy crush margins and fading demand for U.S. crops. First half revenues for ADM were down 10% with earnings down 42%. The company’s Ag Services and Oilseeds branch suffered a 56 percent year-on-year plunge in quarterly operating profits due to multiple challenges.

ADM Chair of the Board and CEO Juan Luciano said in a company release that “In the second half of the year, improvements in both crush and ethanol, our efforts in operational excellence, the focus on our key priorities, and our team’s agility give us confidence in our full-year expectations, despite uncertainties in the external environment.”

On the equipment side, farm and construction maker CNH Industrial lowered its full-year profit forecast for the second time as slowing tractor and combine demand mutes recovery hopes. Second quarter revenue for CNH was down 16% with net income down 30%.

Crop protection and seed companies such as Corteva and FMC saw their earnings and revenues drop as well. Corteva reported sales down 3% and earnings down 2% last quarter while FMC reported revenues down 17% with net income up 28% in the first half of the fiscal year.

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