(Bloomberg) -- Cargill Inc. took a revenue hit of almost 10 per cent in its most-recent fiscal year, a setback for the world’s biggest crop trader after two straight years of records sales.
Revenue for the 12 months ended in May fell to US$160 billion, compared with about $177 billion in the prior period, the closely held Minneapolis-based company said Tuesday in its annual report.
The figure comes as Chief Executive Officer Brian Sikes is streamlining operations after missing profit targets — his first big shakeup since taking the helm at what’s been long-vaunted as America’s largest private company.
Bumper global harvests have squeezed profits for agricultural commodities traders such as Cargill. Rivals Archer-Daniels-Midland Co. and Bunge Global SA — which make up the so-called ABCDs of global agriculture commodity trading alongside Louis Dreyfus Co. — recently reported shrinking earnings.
Cargill is reducing the number of business units to three from five as a part of its 2030 strategy, Bloomberg reported last week.
Grain traders are under pressure from ample supplies, reversing the windfalls from previous years, when crop losses and Russia’s invasion of Ukraine sent prices surging. Margins from processing soybeans into meal and oil — a key earnings driver — have also eroded.
For Cargill, the squeeze in margins was also compounded by the smallest American cattle herd in seven decades. The trading giant had spent much of the past decade turning itself into the US’s third-largest beef processor — a bet that paid off during the leadership of former CEO David MacLennan but that was just starting to sour when Sikes took over in January 2023.
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