Crop Traders Report Tariffs Weighing on Profits, Outlooks

By Ryan Hanrahan

Global crop trading companies — including Archer-Daniels-Midland, Bunge Global, and Andersons Inc. — have largely reported this week that uncertainties surrounding tariffs and trade have taken a toll on first-quarter profits and could continue to affect bottom lines throughout the remainder of 2025.

Reuters’ Karl Plume and Mrinalika Roy reported that “tariffs and trade chaos stung Archer-Daniels-Midland as the grains merchant on Tuesday posted its weakest first-quarter profit in five years and warned of eroding returns amid U.S. President Donald Trump’s efforts to redraw global markets.”

“Slumping sales and weak crop-processing margins slashed operating profit by more than half for ADM’s ag services and oilseeds unit, its largest division, more than offseting flat to stronger results in its other business segments,” Plume and Roy reported.

“Trade tensions between the U.S. and China, the largest crop importer, are creating a drag for ADM, which has seen its profit erode in recent quarters due to ample global crop supplies and thinning margins,” Plume and Roy reported. “ADM is also reeling from an accounting scandal that sparked federal investigations and sent its stock price tumbling, with shares down nearly 30% since news of the financial irregularities broke in January last year.”

“The company is responding to the challenges through a cost-cutting and consolidation push. ADM said in February it planned to cut costs by $500 million to $750 million over the next three to five years and has been slashing jobs and downsizing operations since then,” Plume and Roy reported. “ADM reaffirmed its full-year adjusted earnings forecast of $4–4.75 per share, but said it expects profit at the lower end of the range. Although it would be the company’s weakest performance since 2020, the guidance was not as dire as some investors had feared.”

Reuters’ Plume reported in a different article that “grain trader and processor Bunge Global posted a smaller than expected first-quarter profit drop on Wednesday as anxiety over rising tariffs boosted export demand for its products. But weak oilseed crush margins in North America and Argentina, and lower returns in ocean freight operations, dampened earnings as the company turned in its lowest first-quarter result in five years.”

“Bunge (also) reaffirmed its prior 2025 earnings guidance of an adjusted $7.75 per share, but said its outlook for agribusiness, its largest segment, would be weaker than previously expected,” Plume reported. “If realized, it would be Bunge’s worst annual profit since 2019, according to LSEG data.”

Bloomberg’s Michael Hirtzer reported that “shares of crop handler Andersons Inc. slumped to the lowest level in more than two years as uncertainty around tariffs and US port fees upended trade, pressuring first-quarter results. Importers put off purchases of U.S. grain and oilseeds as President Donald Trump threatened tariffs as well as levies on any Chinese vessels docking at American ports.”

“While tariffs have been paused on some nations and most bulk agricultural cargoes will be exempt from the port fees, the developments still hit the Ohio-based company,’ Hirtzer reported. “The trade uncertainty ‘disrupted typical grain flows and negatively impacted commodity values,’ Andersons Chief Executive Officer Bill Krueger said Wednesday on a call with investors. ‘This resulted in limited merchandising activity beyond immediate customer needs.’”

“The agribusiness segment, which includes crop trading, had a pretax loss of $10 million in the first quarter, the company said in a statement,” according to Hirtzer’s reporting. “That was partly offset by gains in the renewable segment, which reported income of $23 million, compared to a loss a year earlier.”

Corteva Beats Wall Street Expectations

Reuters reported Wednesday that “U.S. agrichemicals firm Corteva beat Wall Street expectations for first-quarter profit on Wednesday, helped by higher prices for its seeds. The results come as the agrichemical industry braces itself against a potential fallout from U.S. President Donald Trump’s trade policy.”

“Corteva said it continues to expect current-year net sales of $17.2 billion to $17.6 billion, but added the outlook did not reflect the impact of tariffs,” Reuters reported. “‘We are not expecting a material net impact on our full-year 2025 results given policies in place today. Global grain and oilseed demand is not expected to decline, regardless of any changes in trade flows,’ it added.”

“However, Corteva’s better-than-expected profit was overshadowed by lower sales across segments and geographies,” Reuters reported. “Total sales fell 2% to $4.42 billion during the first quarter due to weakness in key markets such as Europe, Latin America, and Asia.”

Crop Traders Report Tariffs Weighing on Profits, Outlooks was originally published by Farmdoc.