Company update: Archer Daniels Midland

Net income dropped to $64 million from $372 million a year earlier. Sales declined 24% to $16.5 billion in the three months through June.

 

CEO Patricia Woertz, has reduced its oilseed crush volume as demand for protein meal and vegetable oil slowed.

 

Soybeans and corn plunged from record prices last year on concern that the financial crisis will reduce consumption of food, feed and biofuel.

 

The company, the second-largest US ethanol producer, posted a $160 million operating loss from processing corn into ethanol and other products, compared with a profit of $123 million a year earlier, because of lower average sales prices and higher corn costs.

 

“We see the ethanol market looking very good going forward,” Chief Financial Officer Steven Mills said during a conference call with analysts. “We see the supply and demand very close to balanced.”

 

Agricultural services, which include grain storage and transportation, posted an operating loss of $17 million, compared with a $106 million profit a year earlier.

 

Apart from slowing global demand, the unit also had “less favourable risk management results.” The unit accounted for 30% of total operating profit in the last fiscal year through June.

 

Operating profit from crushing oilseeds such as soybeans, rapeseed and canola fell 39% to $227 million partly because of lower North American crush volumes.

 

Profit from processing corn into starch and sweeteners such as high-fructose corn syrup, used in candy and sodas, rose 7.2% to $149 million.