Global Grain Glut Leading ADM to Consider Cuts to European Business
The fallout from the ongoing global grain glut and heightened competition from smaller companies has Archer Daniels Midland (ADM) examining cuts to its European business as a way to boost profits, reports Reuters.
After the company’s agricultural global trading desk posted its third quarterly loss in the past five quarters, ADM announced that the pressure from adverse market conditions continues to make grain trading increasingly difficult, leading to a 10 percent drop in the company’s share value - the largest single day drop in eight years.
Sources say that the company could make cutbacks at its operations in the UK, Spain, Ireland, and at its back-office in Germany, and may also cut operations or merge operations associated with German trading house, Alfred C. Toepfer, which ADM completely acquired in 2014.
In recent months, ADM has already exited energy trading, reduced its team, and announced the close of its South African trading operations and the reorganization of its Argentinian operations.