MINNEAPOLIS, MINNESOTA, U.S. — Cargill is directing its insights, capabilities and resources toward “answering some of the world’s biggest questions,” David W. MacLennan, chairman and chief executive officer of Cargill, noted in the company’s 2019 annual report released July 30. Cargill used the report as a platform for laying out its goals of accelerated growth and sustainability.
“Everyone at Cargill is relentlessly determined to transform what is possible in food, agriculture and nutrition,” MacLennan said. “In 2019, this included enhanced policies and commitments in support of the UN Sustainable Development Goals, including a strengthened human rights commitment and global forest policy.”
The company announced details of its financial performance for the 2019 fiscal year, which showed adjusted operating earnings of $2.82 billion, down 12% from the previous year. Cash flow from operations totaled $5.19 billion. Strategic acquisitions, joint ventures, and new and existing facilities made up $2.81 billion of the operations budget. Revenues dipped by 1% to $113.5 billion for fiscal 2019.
Cargill said its North American protein businesses led its earnings for the past year. Cargill saw strong domestic and export demand, especially in its beef business, for the third consecutive year. Value-added egg products also did well, according to the company. However, it saw a mixed result due to market challenges across the global poultry business.
Animal nutrition results trailed as regional challenges were seen in aqua, compound feed, premix and feed additive businesses. The African swine fever outbreaks across China and nearby countries also played a factor in hurting this sector of the company. Trade disputes also hindered performance, Cargill noted.
“Although short of our ambitions, this year’s earnings were achieved in the midst of immense geopolitical uncertainty, especially related to global trade,” said MacLennan and David Dines, chief financial officer, in their letter to stakeholders. “We have long said there are no winners in a trade war, particularly an escalating conflict between the U.S. and China, the world’s two largest economies. To that, add the ambiguities surrounding Brexit and the renegotiation of NAFTA, as well as conflicts in Central America and other regions.”
Substantial growth of the business is still planned, particularly in the Asia-Pacific area. Since November 2018, Cargill announced a $235 million chicken and pork expansion in the Philippines over the next two years; a $70 million chicken and seafood expansion in Thailand; and a $48 million poultry plant opening on mainland China.
Sustainability remains a priority. Last year, the company announced it would cut greenhouse gas emissions from operations by 10% by 2025, against a 2017 baseline.
“To help reach this goal, we signed a virtual power purchase agreement with Geronimo Energy to buy 50 megawatts of renewable power from its new wind farm in the U.S. state of South Dakota, while our partner and strategic customer Walmart will buy the remaining energy from the installation,” Cargill said. “The wind farm is expected to come online at the end of 2019. This agreement complements our drive to increase the use of energy from renewable sources, and it represents approximately one-tenth of our target for emissions reductions from our global operations.”
As part of its outreach to its supply chain partners, Cargill trained more than 1.6 million farmers in sustainable practices during the past year. With a total of 2.3 million since 2017, the company plans to reach the goal of 10 million farmers by 2030. Cargill also made $61.3 million in charitable contributions across 56 countries and invested $15.1 million in education programs. Serious injuries for employees were reduced more than 60% since 2017.
The entire report can be found here.