Turkey recall damages Cargill earnings
US company Cargill has reported $100 million in earnings from continuing operations in the fiscal 2012 second quarter ended Nov. 30, 2011, an 88% decrease from the same period a year ago.
“The second quarter was significantly below expectations, especially in contrast to last year when we posted our strongest quarter ever,” said Greg Page, Cargill chairman and chief executive officer. “Our food ingredients and agriculture services businesses generated solid earnings. At the same time, our commodity-based trading and asset management businesses faced significant challenges. First, commodity and financial markets were driven more by political uncertainties than by underlying supply and demand fundamentals. Second, our performance in the sugar market was poor. Finally, we recognised a significant number of one-time items, including asset impairments, and acquisition and integration expenses.”
He said the meat business had "one of their weakest quarters" after a turkey recall, the third-largest meat recall in US history, and poor beef margins. The company recalled 18,000 tonnes of ground turkey last August and shutdown of its Springdale-Arkansas plant during the quarter. The plant reopened on December 19.
Cargill's $2 billion acquisition of Provimi, a leading global animal nutrition company, was its largest in recent months and was completed in November.
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