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Agribusiness and trading company Cargill first-quarter profit falls, declining fertilizer prices

By Germaine Lombardo for CEOWORLD Magazine Updated:October 13, 2009

U.S. agribusiness and trading company Cargill Inc [CARG.UL] reported a 65 percent drop in quarterly profit on Tuesday, hurt by plunging earnings at fertilizer maker Mosaic Co (MOS.N), in which Cargill is the majority shareholder.

Mosaic said last week that profit fell 91 percent in its first quarter as farmers, many of whom had stocked up on fertilizer earlier in the year, held back on purchases in the quarter ended Aug. 31.

Minneapolis-based Cargill, one of the world’s largest private corporations, said it earned $525 million in its fiscal first quarter that ended Aug. 31, compared to $1.49 billion a year earlier.

Earnings of $525 million were down significantly from last year’s $1.49 billion for the quarter ended Aug. 31, mostly due to weaker performance from Cargill’s holdings in Mosaic, the Plymouth, Minn.-based fertilizer giant.

The earnings drop follows similar news in Cargill’s annual report delivered in August, when it said falling fertilizer sales dragged down earnings.

Earnings in agriculture services and food ingredients and applications were up from a year earlier, due in part to lower raw material costs, the company said.

Cargill, which operates in dozens of countries, is a leading US grain exporter, a major producer of ethanol, and a top energy trader, among other businesses.

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