ADM profits from biofuel unrest

Net earnings for the quarter reached $517 million versus $363 million a year
ago. Revenue surged more than 64% to $18.7 million compared to $11.38 million
last year.

Results were driven by an almost sevenfold increase in profits
at ADM’s Agricultural Services Division, from $46 million to $366 million. The
division includes the company’s grain transportation and handling services,
which continues to move last year’s large corn crop and other commodities in
high demand.

The division also includes a large grain-trading operation
that tries to profit from shifts in commodity prices, which buffers ADM against
price spikes.

Shares down
Worries that the US government will
repeal or soften mandates on blending ethanol with gasoline sent shares of ADM
down 4.7% last week.

CEO Patricia Wertz of ADM defended the use of corn
to make ethanol as food prices rise around the world, leading to riots and many
countries limiting exports. There are growing calls for the United States to cut
a tax credit of 51 cents a gallon for ethanol blenders and eliminate a tariff on
ethanol imports.

“I actually find it sad, and even a little ironic, that
this attack on biofuels is directed to the one alternative we have today,”
Woertz said.

“Biofuels are a real solution to a real problem. To retreat
from biofuels is wrong. It’s foolish. It’s dangerous. It’s an empty gesture. It
won’t fill anyone’s stomach. It won’t fill anyone’s gas tank,” she
added.

About 25% of US corn is turned into ethanol, according to US
Agriculture Department estimates, and corn futures have risen 70% in the past
year and hit record highs on increased demand to use the grain both as food and
fuel.

For regular updates on feed news subscribe here
to our free newsletter