Ample global supply weighed on prices of staple crops such as corn and soybeans in the past two years and eroded earnings for agribusiness groups like LDC and U.S. rivals ADM, Bunge Global and Cargill.

LDC said its core earnings before interest, taxes, depreciation, and amortization reached $1.83 billion (C$2.51 billion) last year, against $1.88 billion in 2024.

Group net profit fell to $653 million (C$894.3 million) from $726 million.

“Markets were marked by ongoing geopolitical crises, the implementation of new tariffs on international trade flows, and concerns about the slowdown in global economic growth,” it said in an annual report.

Average prices for LDC’s main commodities were lower, with the exception of coffee. However, shipped volumes rose sharply, helped by expansion in capacity and strong demand for corn and soybeans, it said.

Volumes jumped 10.6 per cent year on year, helping net sales rise to $53.2 billion (C$72.9 billion) from $50.6 billion the prior year.

Middle East conflict not significantly felt

LDC doubled capital expenditure to $2 billion (C$2.7 billion), it said.

Uncertainty over U.S. biofuel policy, meanwhile, weighed on the performance of its vegetable oils business, LDC said, echoing comments by its peers.

The Middle East conflict has not significantly impacted LDC’s activities so far, the group said.

The U.S.-Israeli war on Iran has unsettled agricultural markets by creating tensions in fertilizer supply and maritime transport, threatening to raise food costs.

Bunge said earlier this month it was exploring alternative shipping routes because of the conflict.

Benchmark grain and soybean prices in Chicago climbed to multi-month and multi-year highs last week as the war sent crude oil soaring, a departure from depressed levels seen in grains in the past two years.

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LDC — commonly known as Dreyfus and part of the ABCD quartet of global crop merchants alongside ADM, Bunge Global and Cargill — said first-half volumes were up 4.4 per cent on the year, contributing to a 2.3 per cent rise in sales to US$26.2 billion.

Core EBITDA profit, however, fell 6.6 per cent to $987 million while net profit dropped 14.5 per cent to $418 million.

The group’s coffee division stood out by posting higher operating profit, supported by increased volumes and prices. But most other units, including grains and oilseeds, recorded lower results due to weaker prices, trade tensions and an uncertain economic climate, LDC said in an interim financial report.

The company increased capital expenditure in the first half to US$521 million from US$299 million a year earlier, notably to expand oilseed processing, including in North America.

LDC is set to expand its global oilseed capacity further after acquiring assets in Hungary and Poland from Bunge. It said the initial price of the acquisition was US$483 million.

Higher first-half spending contributed to a rise in LDC’s adjusted net debt to $2.4 billion from $1 billion at the end of 2024, it said.

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The deal covers assets previously owned by Viterra that Bunge had offered to sell in order to secure European Union approval for its US$34 billion merger with Viterra.

In Hungary, the activities include an oilseed processing plant in Fokto that is one of Europe’s largest sunflower seed crushing facilities, LDC said in a statement.

The Polish assets feature an oilseed facility at Bodaczow that accounts for around 15 per cent of Poland’s total rapeseed crush volume, it said.

The deal also covers trading offices in the Hungarian capital Budapest and the Polish port city of Gdansk.

Financial terms for the deal were not disclosed.

The acquisition would allow LDC to expand in the sunflower market and in Central European countries, complementing its existing grains and meals business in Poland, Andre Roth, LDC’s head of grains and oilseeds, said in the statement.

Bunge officially completed its merger with Viterra at the start of July, two years after announcing the transaction.

— Reporting by Gus Trompiz and Sudip Kar-Gupta

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LDC, whose competitors include ADM, Bunge and Cargill, said in a results statement that its earnings before interest, taxes, depreciation, and amortization reached $1.88 billion (C$2.69 billion), down 15 per cent compared with 2023. Net income fell 28 per cent to $726 million (C$1.04 billion).

Why it matters: Louis Dreyfus company is a major buyer of Canadian crops

Net sales were stable at $50.6 billion (C$72.5 billion), supported by a 17 per cent rise in volumes.

The group’s grains and oilseeds business recorded lower operating profit after strong 2023 performance, with its corn and soybean activities affected by a context of low volatility, LDC added in an annual report.

Like its peers, it also pointed to reduced oilseed crushing margins in China and the United States, with the U.S. market affected by uncertainty over biofuel policy.

Global prices of corn, wheat and soybeans last year slipped to their lowest since 2020 amid rising supplies and signs of slowing demand from China, a turnaround from high prices in the wake of Russia’s invasion of Ukraine in 2022.

ADM and Bunge both reported lower fourth-quarter earnings.

Trade war to pressure earnings

Crop traders also face international trade volatility as U.S. President Donald Trump pushes tariffs as an economic and diplomatic tool.

Bunge warned that its 2025 earnings could sink to the lowest in six years, partly due to trade tensions.

Tougher market conditions have led Cargill to embark on a push to lower its headcount by five per cent and ADM to plan a reduction of up to 700 jobs.

LDC said its coffee business recorded higher earnings, supported by increased margins and volumes against a backdrop of weather setbacks to crops, while its sugar division’s profits declined as prices were more range-bound than the previous year.

LDC has partly shifted its focus towards the consumer end of the food chain to be less reliant on commodity trading.

Last year, it bought an ingredients business from chemicals maker BASF, launched a juice brand and created a unit trading in pulses, which include beans, lentils and peas.

The group said it increased capital expenditure sharply last year to $1 billion from $636 million (C$1.43 billion from $C911 million) in 2023.

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LDC has partly shifted its focus towards the consumer end of the food chain to become less reliant on commodity trading. It launched its own juice brand and established a pulses unit to support expansion into plant-based protein products.

The deal with BASF includes a production site and an R&D centre in Germany and three application labs outside of Germany, LDC said.

BASF said separately that the food and health performance ingredients business had limited synergies into the group and was no longer a strategic focus area for it.

The companies did not give financial details of the agreement.

— Reporting by Sybille de La Hamaide

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LDC stopped exporting Russian grain on July 1, 2023, and said it was assessing options for transferring its existing Russian business and grain assets to new owners.

Scores of Western companies have sold assets or abandoned the Russian market since Moscow sent troops into Ukraine in February 2022.

Presidential approval is required for deals in the finance and energy sectors.

Other international grain traders, such as Cargill and Viterra, have curtailed and operations in Russia since the invasion.

Putin’s order, authorising the sale of Russian Elevator Company (Ruselco) was dated Nov. 28. LDC did not immediately respond to a request for comment.

A source in agriculture markets named Bio-Ton, one of Russia’s largest sunflower producers, as the possible buyer.

Bio-Ton could not be reached immediately for comment.

— Reporting by Olga Popova

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LDC, one of the world’s largest crop traders and processors whose competitors include ADM, Bunge and Cargill, said its core earnings (EBITDA) were $1.057 billion (C$1.434 billion) in the first six months of 2024, against $1.169 billion (C$1.586 billion) a year earlier.

Net sales fell to $25.6 billion (C$34.7 billion) from $25.8 billion (C$34.0 billion) but shipped volumes rose 19.4 per cent, LDC said in a statement.

“Our diverse and global business activities allowed us to deliver strong results … as an overall recovery in crop sizes and ample stocks globally put pressure on prices and resulted in less volatile market dynamics,” said CEO Michael Gelchie.

Global prices of corn, wheat and soybeans have slipped to their lowest since 2020 amid rising supplies and signs of slowing demand from China, a turnaround from surging prices two years ago after Russia’s invasion of Ukraine.

ADM and Bunge both posted lower than expected second-quarter profits in July, reflecting leaner margins for oilseed crushing.

LDC also cited weaker processing margins in North America and slow farmer selling in Brazil.

Operating profits fell at LDC’s grain and oilseeds business and also at its cotton business, in the face of slow global demand, and at its sugar unit as volumes fell, it said.

LDC said profits improved for its coffee business due to higher volumes and better origination margins, particularly in Brazil, adding it had successfully hedged risk during volatility linked to crop setbacks and Red Sea shipping disruption.

It did not give an outlook for its full-year.

LDC has partly shifted its focus towards the consumer end of the food chain to become less reliant on commodity trading. It has launched its own juice brand and established a pulses unit to support expansion into plant-based protein products.

The group, privately controlled by Margarita Louis-Dreyfus via family trust Akira, said it paid a $507 million dividend to shareholders during the first half.

—Reporting for Reuters by Gus Trompiz and Tassilo Hummel

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The company hopes to use its orange production in Brazil to tap into demand for fresh and traceable fruit juices, the agricultural commodity group said March 12.

LDC is a global trader and processor of farm goods and estimates it is one of the world’s three largest orange juice suppliers, supported by its plantations and factories in Brazil.

The Montebelo Brasil label, named after one of its Brazilian plantations, is the first LDC-owned juice brand. The group sees room at the premium end of the market, despite shoppers facing price hikes linked to orange harvest setbacks, executives told reporters in Paris.

The brand went on sale in early March and is expected to reach 3,000 French supermarkets by the end of the year. LDC is aiming for a 10 per cent share of the nation’s fresh juice category within three to four years, said Aurelien Grisval, head of downstream markets at LDC’s juices division.

The news touches on continued controversy over Brazilian agriculture and deforestation. That issue is at the heart of French opposition to a trade deal between the European Union and South American bloc Mercosur.

But Brazilian citrus fruit, grown in the southeast of the country, is viewed positively by consumers and LDC hopes to bolster that image through full traceability for its orange juice and multi-fruit products, Grisval said.

Juice sales volumes in France have declined in the past year, particularly in the fresh category, as record orange juice commodity prices have been felt in shops, alongside inflation in other breakfast staples like coffee and cocoa.

The orange juice market, dominated by Brazil, has been roiled by adverse weather and greening, a bacterial disease that has hit orange harvests.

Brazil may face another disappointing orange crop next season after a heatwave a few months ago, Grisval said.

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LDC, one of the world’s largest crop traders and processors whose competitors include ADM, Bunge and Cargill, said 2023 core earnings (EBITDA) dipped to US$2.22 billion from $2.35 billion a year before, while its net income remained stable at $1.01 billion.

Sales fell more sharply, to $50.6 billion from $59.9 billion in 2022, reflecting a fall in prices and volumes.

“LDC’s performance remained resilient despite lower volumes sold and decreased volatility compared to 2022,” the group said in an annual report.

While markets were less chaotic than in 2022, when the start of Russia’s full-scale invasion of Ukraine pushed global food commodity prices to a record high, the war and weather setbacks continued to disrupt supply and let LDC use its global network to generate profitable trade, it said.

Demand for Brazilian crops in China helped drive stronger results at its grain and oilseed business, it added.

LDC had previously reported a drop in first-half earnings.

It did not give an outlook for 2024 performance. Rival Bunge said last month it expected lower earnings this year as ample crop supplies curb margins.

LDC, which handles farm goods from sugar to cotton, has partly shifted its focus towards the consumer end of the food chain to become less reliant on commodity trading.

The group said it increased capital expenditure almost 16 per cent year-on-year, supporting the expansion of oilseed processing and not-from-concentrate juice production.

In Russia, where the group stopped sourcing grain like other multinational merchants last year, it booked a $60 million loss for the deconsolidation of its local business.

Last year’s earnings helped push up LDC’s equity value to a new record of $6.7 billion as of Dec. 31, 2023, up from a previous high of $6.1 billion a year earlier.

Improved results and the entry of Abu Dhabi holding firm ADQ as a shareholder in 2021 have helped resolve tensions over debt and ownership at the group, which is controlled by Margarita Louis-Dreyfus via family trust Akira.

—Reporting for Reuters by Gus Trompiz and Dominique Vidalon.

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Louis Dreyfus will construct the facility at its existing industrial complex in Yorkton and aims for it to be ready by the end of 2025, the company said in a statement said on Wednesday.

Financial details were not disclosed.

The facility, expected to employ about 60 people, will produce ingredients suited for dairy alternatives, high-protein nutrition solutions and other plant-based applications, drawing on technology developed at an Louis Dreyfus’ research centre in California, it said.

“Pea protein demand continues to grow, due to its non-allergen and non-GMO status, and its sustainability and versatility across many food applications,” Thibaut Ferte, the company’s head of plant proteins, said in the statement.

Other major agrifood firms have also sought to tap into Canada’s large pea production in recent years to develop meat-substitute proteins.

The Yorkton site currently houses an oilseed crushing facility for which the group plans to double capacity, partly to cater for booming use of renewable diesel in North America as a lower-emission road fuel.

–Reporting for Reuters by Gus Trompiz.

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