CHICAGO – Cargill Inc. (search) , the largest private company in the United States, on Tuesday said quarterly net income rose 43 percent on strong performances in its food ingredients and grain processing segments.
The Minneapolis-based agriculture conglomerate said net profit for the first quarter of fiscal 2005 ended Aug. 31 rose to $495 million from $347 million.
Cargill said demand for fertilizer and steel also improved during the quarter. Net profit included $38 million from the sale of four mini steel mills.
Cargill, which is involved in grain and crude-oil trading, meat processing and fertilizer production and sales, said quarterly earnings from continuing operations rose 33 percent to $457 million from $345 million.
The company, which competes with publicly traded Archer Daniels Midland Co. (ADM) and Bunge Ltd. (BG), said the gains in grain processing were posted despite volatility in the price of U.S. soybeans and uncertainty over demand from China.
Several processors from China, the world's top soybean importer, defaulted on payments for their purchases from Brazil after the Chinese government tightened credit, causing soybean prices to tumble.
"I think us and others are all dealing with a tremendous amount of uncertainty," said Cargill spokeswoman Lisa Clemens.
U.S. grain companies have tightened financial terms on soy sales to Chinese processors since the defaults, Clemens said, but declined to give details.
Soft demand from China could pressure prices of U.S. soybeans, especially with forecasts for a record-large crop this year.
In its food ingredients operations, Cargill said it had extended its reach to food, chocolate and confectionery companies in Europe through its purchase of two cocoa processing facilities in England and Germany.
The company also strengthened its position in the meat industry through its acquisition of a supplier of frozen beef patties to fast-food restaurants in Canada.
Cargill has also announced plans to buy a majority stake in a leading Brazilian pork and poultry processor.
The company said it was set to combine its fertilizer operations with those of IMC Global Inc. (IGL), whose shareholders will hold a meeting on Oct. 20 to vote on the merger announced in January.