$165 billion! Cargill's fiscal 2022 revenue soars to record levels
The strong sales trend for global grain traders has continued despite supply chain woes and rising food inflation. Cargill Inc., one of the world's four largest grain merchants, just reported record annual revenue.
Cargill reported sales for the fiscal year ended May 31 in its annual report on Wednesday. Revenue soared 23% to a record $165 billion in fiscal 2022, a season of “extreme events.”
The company did not release specific profit figures. As a privately held company, Cargill has broken its more than 20-year tradition in 2020 by not publicly releasing most of its quarterly and annual financial data.
However, according to previous media reports, Cargill’s net profit in fiscal 2021 reached $4.93 billion, while sales for the year were $134.4 billion. From this, it can be speculated that the company's earnings in fiscal 2022 are still quite impressive.
Cargill Chief Executive Officer David MacLennan and Chief Operating Officer Brian Sikes said in a letter to shareholders that the fiscal year has continued to be characterized by extreme events, including "the ongoing Covid-19 pandemic, severe weather, trade disruptions and the Russian-Ukrainian conflict." They expect continued disruption in their industry and world, but the company remains optimistic that new ways forward will continue to be found.
A 157-year-old company, Cargill employs 155,000 people in 70 countries and sells to customers in 125 countries.
Last month, Cargill and Continental Grains bought Sanderson Farms, the third-largest U.S. chicken producer, for $4.5 billion, giving it about 15 percent of the U.S. chicken market. Cargill is also one of the largest beef processors in the United States.
Food crisis big winner
The Russia-Ukraine conflict has disrupted global trade in commodities, especially corn, wheat and vegetable oils from the Black Sea region. Global crop prices have risen sharply as uncertainty surrounding supplies and deliveries in the region rises, presenting grain traders with an excellent opportunity to profit.
Cargill rivals Archie Dennis Midland (ADM) and Bunge Ltd. both raised their full-year 2022 guidance last month after reporting second-quarter earnings, citing high global food prices. . Among them, ADM announced its highest quarterly results ever.
As the world's "four major grain merchants", ADM, Bunge, Cargill, and Louis Dreyfus together control 80% of the world's grain trade.
Data released by the Food and Agriculture Organization of the United Nations (FAO) earlier this month showed that the global food price index fell 8.6% month-on-month in July, the largest decline since October 2008 and the fourth consecutive monthly decline, but still year-on-year. 13.1% higher.