Trade Tensions, Biofuel Uncertainty Hit Agribusiness Profits

By Ryan Hanrahan

Ongoing trade tensions and uncertainty about U.S. biofuel policy contributed to second quarter profits hitting multi-year lows for a number of crop trading companies  including Archer-Daniels-Midland and Bunge Global SA  while ag equipment manufacturers warned those trade tensions will begin increasing equipment prices in the second half of the year.

Reuters’ Karl Plume and Katha Kalia reported that “Archer-Daniels-Midland posted its lowest second-quarter profit in five years on Tuesday as U.S. trade upheaval and uncertainty around biofuel policies slowed sales and crimped trading and crop processing margins.”

“The company warned that full-year 2025 adjusted earnings would drop to around $4.00 per share, the lowest since 2020, after a weak first half with ongoing global trade challenges,” Plume and Kalia reported. “But ADM forecast a better operating climate later this year as recent U.S. government proposals to increase biofuel use and support domestic feedstocks were poised to boost crop processing margins and sales, sending its shares up as much as 5.3%.”

“Chicago-based ADM is bracing for the impact of U.S. President Donald Trump’s sweeping tariffs on most imports, and any trade retaliation which often targets agricultural products,” Plume and Kalia reported. “ADM and agribusiness peers including Bunge and Cargill have reported eroding profits in recent quarters due to ample global crop supplies and thinning margins. Trump’s tariff threats and shifting deadlines for duties have fueled further chaos for global grains merchants like ADM.”