By Ryan Hanrahan
Reuters’ Karl Plume reported Tuesday that “grains merchant Archer-Daniels-Midland posted its lowest fourth-quarter adjusted profit in six years on Tuesday on weak oilseed crush margins and uncertainty over U.S. biofuel policy and said it is cutting costs and slashing up to 700 jobs to weather the market downturn.”
“Chicago-based ADM said it aimed to cut costs by $500 million to $750 million over the next three to five years via job cuts and lower raw materials and manufacturing costs,” Plume reported. “Reuters had reported last week that the grain trader would soon start laying off employees in a global effort to cut costs, with the bulk of cuts expected in the United States, according to sources. ADM did not provide details about the cuts, which would represent roughly 1.7% of its global workforce.”
“ADM’s profit has eroded amid slow demand and a global glut of staple crops like corn and soybeans, which it buys, sells, processes and ships around the world. Prices of both crops hit four-year lows in 2024 as global stocks of the food staples ballooned to multiyear highs, pressuring margins,” Plume reported.
“Fourth-quarter operating profit in ADM’s agricultural services and oilseeds division, its largest segment, tumbled 32% from a year earlier on weak North American oilseed crushing margins and uncertainty around biofuel policies,” Plume reported. “The company expects the division to post flat to lower operating profit this year, while earnings in its carbohydrate solutions division were expected to contract.”
Reuters’ then reported Wednesday morning that “Bunge Global missed Wall Street’s expectations for fourth-quarter profit on Wednesday, after a global glut in crop prices took a hit on the grain trader’s margins.”
“Bunge’s agribusiness segment, which represents over 80% of its total revenue, saw adjusted core earnings decline to $364 million in the fourth quarter from $639 million a year earlier,” Reuters reported. “Gross profit at its Refined and Specialty Oils segment fell 19.5% to $275 million in the fourth quarter.”
Farm Equipment Manufacturers Face Tough 2025 Outlook
Reuters’ Abhinav Parmar reported Tuesday that “CNH Industrial on Tuesday forecast full-year profit below Wall Street’s estimates, and said it expects weak demand for farm equipment to bottom out by the year-end, before picking up in 2026.”
“The Basildon, UK-based company expects sales to be lower year-over-year in both its agriculture and construction equipment markets in 2025,” Parmar reported. “Farm equipment demand remains subdued due to falling farm incomes globally, forcing farmers to rethink their big-ticket purchases, leading to higher dealership inventories and moderation in restocking efforts. The company said it continues producing fewer units than the retail demand to reduce elevated inventory levels at its dealers but added that inventories remain high.”
“‘Agriculture dealer inventory went down in Q4 by over $700 million due to focused retail sales support and 34% fewer production hours,’ CNH CEO Gerrit Marx said,” according to Parmar’s reporting. “CNH expects the industry to start bottoming in 2025, adding that it expects retail demand in North America to increase gradually in 2026, Marx said on a post-earnings analyst conference call. … The company expects pricing to be flat to slightly down in the first half of 2025 and expects lower margins in the first two quarters of the year as well.”
In November 2024, Bloomberg’s Michael Hirtzer reported that John Deere “reported fourth-quarter earnings that topped expectations, but said net income for fiscal 2025 will be between $5 billion and $5.5 billion. That’s below the $5.83 billion average of analyst estimates compiled by Bloomberg. The full-year guidance ‘is ugly, but expectations were already very low,’ according to Vital Knowledge analyst Adam Crisafulli.”
Tyson Foods Earnings and Outlook Positive, However
Food Dive’s Sarah Zimmerman reported Tuesday that “Tyson Foods said profits in its chicken segment reached its highest level in eight years as surging consumer appetite for protein pushes up poultry demand.”
“The poultry and meat processor on Monday reported its third consecutive quarter of increased earnings, with chicken profits doubling compared to the same period a year earlier. Executives attributed the performance to higher sales in the food service sector, along with improved efficiencies in manufacturing,” Zimmerman reported. “Chicken sales have helped Tyson offset challenges in beef and pork. Tight cattle supply and lower pork prices have compressed margins in both segments.”
“Tyson raised guidance for its chicken segment, saying it expects the division to generate $1 billion to $1.3 billion in adjusted operating income for fiscal 2025,” Zimmerman reported. “Despite challenges in beef, executives said the segment performed better than expected amid an uncertain economic environment.”
Source : illinois.edu