Trade

World’s Largest Food Handler Wildly Misses Profits on Expectations for Trump

JM Ashby
Written by JM Ashby

The world's largest food processing and handling company, Archer Daniels Midland (ADM), saw their profits drop by over 41 percent during the second quarter of this year, and while that is alarming it's not necessarily what I want to talk about.

The world's largest processor of corn and cocoa beans, among other things, is pointing fingers at Trump's trade war and historic Midwestern floods fueled by climate change, but it's the expectations for Trump's success that company executives apparently had that led to them missing their profit forecast by such a wide amount.

CEO Juan Luciano reportedly believed Trump's trade war would be over by now.

ADM executives had been banking on the dispute to have eased by the second quarter and had based a rebound of the company's operating performance in the second half on broad grain purchases from China this summer. Such big purchases have not materialized.

The company remains confident in U.S.-China trade resuming, but Chief Executive Juan Luciano acknowledged on Thursday "the timing is uncertain."

The trade fight is part of why ADM has been expanding into Europe, Brazil and South America, Luciano said on an analysts call on Thursday.

Archer Daniels Midland presumably has access to an army of experts and analysts who shape the company's expectations, and yet they couldn't see this coming?

Today is August 1st. Chinese and American officials will not meet face-to-face for more trade talks until nearly the official end of Summer in September. The idea that Trump's trade war will end in the next two months, or that it was ever going to, is preposterous. It's stupefying.

I appreciate that executives are suppose to present the best possible forecast to their shareholders, but those forecasts should never be based on the hypothetical success of Donald Trump.

I don't have a business degree but I would never base the future of a $64 billion company on the happy talk of the Trump White House.

Update... Trump just made a surprise announcement that he's moving ahead with tariffs on all remaining Chinese goods shortly after 1:30 pm. More on that soon.

  • God these people are idiots. All you can really predict is that Trump will turn everything to shit. Assuming anything else is a way to bankrupt your company.

    When will these cultists wake the hell up?

  • Aynwrong

    I’ve never had any particular respect for leaders of American corporations but I’ve always assumed that they knew what they were doing. Yet they seem to operated by people (who are regarded as elites, no less) who continually overestimate Trump’s abilities and underestimate both his depravity and arrogance.

    These are the geniuses that Republican voters think should be leading America?!?

  • muselet

    ADM’s executives are idiots if they thought the Trump Trade War with China would be over by the end of Q2. Donald Trump doesn’t have his precious WIN yet, and until he does, trade with China will be subject to his whims.

    CNN:

    “Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional tariff of 10% on the remaining 300 billion dollars of products coming from China into our country,” [Trump] tweeted.

    [link omitted]

    Three things. First, of course Trump announced this on Twitter, because it’s presidential to let the public know about policy decisions on a medium best suited to letting your friends know where you’re having lunch. Second, Trump believes a 10% tariff is small? And third, does anyone else get the feeling Trump is actively trying to trigger a recession?

    –alopecia

  • gescove

    Titans of Industry Speak: “Derp.”