Louis Dreyfus reports 28% drop in annual profit due to falling grain prices

Louis Dreyfus Company (LDC) on Wednesday reported a decline in annual profit as prices for major grains slowed last year, driven by high harvests and weaker demand in China, Reuters reports.

LDC, which rivals ADM, Bunge and Cargill, said in its earnings report that its profit was $1.88 billion, down 15% from 2023. Net income fell 28% to $726 million.

Net sales were flat at $50.6 billion, supported by a 17% increase in volume.

The company’s grains and oilseeds business saw operating profit decline after a strong 2023. LDC said in its annual report that its corn and soybean businesses were impacted by low market volatility.

Like its peers, LDC also cited shrinking oilseed processing margins in China and the United States, with the U.S. market hurt by uncertainty over biofuel policies.

Global corn, wheat and soybean prices fell to their lowest since 2020 last year on rising supply and signs of slowing demand from China. That was a reversal from the high prices that emerged after Russia’s invasion of Ukraine in 2022.

LDC said its coffee business saw profit growth, supported by higher margins and sales volumes amid weather-related crop problems, while profits at its sugar unit fell due to lower price volatility compared to the previous year.

LDC has shifted its focus to the end consumer in the food chain in part to reduce its reliance on commodity trade.

Last year, the company acquired an ingredients business from chemical maker BASF, launched a juice brand and created a division to trade legumes, including beans, lentils and peas.

The company said it sharply increased capital spending last year to $1 billion, up from $636 million in 2023.

Tags: grain, prices