Archer Daniels Midland (ADM) experienced a decline in its crushing results during the second quarter, following a record-breaking performance in the same period last year.
Ag Services & Oilseeds
ADM highlighted that its South American origination results witnessed a year-over-year increase. The team achieved record volumes and higher margins, driven by strong export demand. The company capitalized on its strategic investments in port capacity to benefit from the record Brazilian soybean crop.
On the other hand, North America origination results saw a slight decrease compared to the previous year. This can be attributed to lower export volumes resulting from ample supplies from South America.
In terms of crushing results, ADM reported a significant drop compared to the record achieved in the second quarter of the previous year. While global soy crush margins remained robust, they were lower across all regions due to softer demand for both meal and oil, along with a tight US soybean carryout. However, strong softseed margins and higher volumes partially offset this decline. Notably, the company benefited from a strong Canadian canola crop and its flex capacity in EMEA.
Refined Products and Other
ADM’s Refined Products and Other segment showed significantly higher results than the prior-year period, setting a new second-quarter record. The company witnessed higher results in North America, primarily driven by strong demand for food oil and improved biodiesel volumes. Additionally, in EMEA, robust export demand for biodiesel and domestic food oil contributed to stronger margins.
ADM’s ethanol margins remained solid as industry stocks stabilized, although they were lower compared to the previous year. However, the company’s Q2 results were negatively impacted by unplanned downtime at one of its corn germ plants.
Furthermore, Vantage Corn Processors’ results were lower due to decreased ethanol margins year-over-year. It is important to note that the prior-year period included a one-time $50 million benefit from the USDA Biofuel Producer Recovery Program.
ADM’s Specialty Ingredients segment experienced a decline in results compared to the previous year, primarily due to softer demand for plant-based proteins in North America and Europe, specifically in the meat alternatives category. However, this decrease was partially offset by strong performance in texturants.