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By Erin Alworth and Isis Almeida, Bloomberg
Cargill Inc. paid a record dividend to the billionaire families who control the world’s biggest agricultural commodities trader after profits surged 44% in its most recent financial year.
The largest privately held company in the U.S. by revenue paid out almost $1.5 billion to shareholders in the year ended May 31, according to the company’s audited annual accounts seen by Bloomberg News. That’s up almost 25% from a year earlier and eclipsed the previous record dividend in 2022, when Cargill made the most money in its 160-year history.
Cargill, which counts at least a dozen billionaires among its shareholders, is owned by the heirs of William Wallace Cargill. The families are split into two branches: the Cargills and the MacMillans. Senior management and other employees also own a small stake.
The Minneapolis-based company benefited from its $4.5 billion acquisition of chicken producer Sanderson Farms Inc. in a joint venture with Continental Grain Co. That business helped drive net income to $3.6 billion, up from $2.5 billion a year earlier, the accounts showed.
Lower crop prices made it cheaper to feed animals. At the same time, consumers turned to chicken to replace pricey beef after the U.S. cattle herd fell to the lowest in seven decades.
“The strong performance in chicken helped counter a decline in U.S. beef, where further tightening of cattle supplies drove up costs and pulled processing margins below the year-ago level,” Cargill said in a management analysis of the results seen by Bloomberg.
Cargill, which stopped publicly reporting its results during the pandemic, declined to comment.
Profits were still almost half of the record $6.7 billion earned in 2022, when Russia’s invasion of Ukraine upended markets. That year Cargill paid its family owners $1.2 billion.
The latest payout included the November approval of a special dividend of $501 million.
Cargill and Continental acquired Sanderson Farms in 2022. Shortly after, the U.S. chicken industry suffered its worst downturn in years. But the sector subsequently recovered as more consumers turned to chicken. The Wayne-Sanderson Farms joint venture made a “significant contribution” to the most recent results, Cargill said.
Poultry operations in Asia, Europe and Latin America also drove growth. The company, which cut some 8,000 jobs last year as part of its 2030 strategy, also benefited from cost savings. That’s about 5% of its global workforce.
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