Cargill Inc.'s fiscal third-quarter profit jumped 33 percent, driven by its meat and animal nutrition business and a turnaround in its energy trading business.
The company benefited from a comparison to weak year-ago performance, when a wrong bet on energy futures yielded trading losses. Cargill never disclosed the precise size of those losses, but reports suggested they were in the tens of millions of dollars.
The Minnetonka-based food processor and provider of agribusiness services said it earned $425 million in the three months ended Feb. 28, up from $319 million in the same period a year ago.
Revenue was $28.4 billion, down 11 percent from $32 billion a year ago.
The company, one of the largest privately owned firms in the world, has been contending with volatile conditions in all of its main markets. In the U.S., crop prices plunged last year and livestock prices rose. But Cargill said its U.S. grain business steered the record crop to "robust" demand in other countries and "limited" output from South America.
Cargill's animal nutrition and protein businesses made the biggest contribution to its latest profit, the company said. It cited strong performance in Australian beef processing, Central American poultry and U.S. pork and turkey processing.
In Australia, a lengthy drought has caused many producers to bring cattle to market, increasing the need for processing, said Cargill spokeswoman Lisa Clemens. Strong domestic poultry brands have done well in Honduras, Nicaragua, Costa Rica and Guatemala, she said.
Cargill's U.S. pork processing business also did well, Clemens said, largely because of improvements and greater efficiencies.
"They're just making great strides and that's showing up in their results, and similarly our U.S. turkey business has been on that same curve and they also had a strong quarter," she said.
Also during the quarter, Cargill reported that it divested a feed yard in Lockney, Texas, a move related to the idling of its Plainview, Texas, beef processing plant in 2013.
It also closed a turkey slicing and packaging facility in Springfield, Mo., and relocated production to locations in Nebraska City, Neb., and Waco, Texas.
"What that did is basically bring the operation closer to where the meat is actually produced," Clemens said, "and it allowed for better logistics and more efficiency."
In early 2014, Cargill was on the wrong side of bets on electricity and natural gas trading at a time when the country endured one of the coldest winters in decades. Those losses shaped the company's bottom-line results.
This quarter, "in volatile petroleum markets, we saw a rebound in our energy businesses, having gained momentum from strategic changes made in the prior fiscal year," said CEO David MacLennan in a statement.
Cargill said its energy traders "successfully navigated the dramatic decline in global crude oil prices and the volatility in petroleum markets that followed."
The company said it was faring well through the dramatic contraction of another major commodity — steel. Though a relatively small business inside Cargill, the company operates eight steel processing centers and said it was well positioned to provide just-in-time deliveries in a market in which steel consumption is falling.
Staff writer Tom Meersman contributed to this report.
Evan Ramstad • 612-673-4241