CHICAGO, ILLINIOS, US — Net earnings for ADM in the second quarter ended June 30 fell 48% as lower soybean crush margins had a negative impact, although starches and sweeteners turned in a strong quarter.

Net earnings of $486 million, or 98¢ per share on the common stock, were down 48% from $927 million, or $1.70 per share, in the previous year’s second quarter. Earnings before income taxes were $596 million, down 47% from $1.13 billion in the previous year’s second quarter due to lower pricing and execution margins as well as higher corporate unallocated costs. Lower pricing and execution margins largely reflected the impact of lower crush and origination margins, according to Chicago-based ADM.

“Our team delivered solid results in challenging market conditions, highlighting the efforts of our teams across the business to manage through the commodity down cycle while putting our Nutrition business on a path to recovery,” said Juan Luciano, president and chief executive officer, in a July 30 earnings call.

Operating profit in ADM’s Ag Services and Oilseeds segment fell 56% to $459 million from $1.05 billion. Lower margins came in South America origination due to a smaller crop in the Brazilian state of Mato Grosso. North American origination results were lower as increased supply from Brazil and Argentina shifted export competitiveness to South American origins.

“Our services and oilseeds results are significantly lower than the record results of prior years due to the ongoing rebalancing of the supply-and-demand environment and overall lower farmer selling,” Luciano said.

Within the segment, operating profit in Ag Services fell 68% to $122 million from $380 million. Operating profit in Crushing dipped 41% to $132 million from $224 million. Global soybean crush margins decreased due to more balanced supply-and-demand conditions and lower soybean values caused by increased imports of used cooking oil.

Demand is increasing for soybean meal coming into North America, which should improve crush margins, Luciano said.

“We’re going to leap into Q4 where we have hopefully a very large crop here in the US,” he said. “Crops look terrific so far in the US. We expect to have plenty of raw materials in that, and demand for soybean meal continues to be strong around the world.”

Operating profit in the segment’s Refined Products & Other declined 62% to $137 million from $362 million. Refining margins eased from historical levels due to increased pre-treatment capacity and higher imports of used cooking oil, according to ADM.

In ADM’s Carbohydrates Solutions segment, operating profit increased 12% to $357 million from $319 million. Within the segment, operating profit increased 7% in Starches and Sweeteners, to $323 million from $301 million, and 89% in Vantage Corn Processors, to $34 million from $18 million. Strong margins and higher volumes in Starches and Sweeteners partially were offset by lower margins in the Europe, Middle East and African region and lower domestic ethanol margins. In Vantage Corn Processing, strong demand for exports of ethanol supported higher margins.

“Carbohydrate Solutions has continued the solid performance trajectory, driven by strong margins for sweeteners, starches and flour with higher volumes year over year,” Luciano said. “Ethanol margins also strengthened as industry production tried to keep pace with the robust export and domestic demand.”

Sales growth came in health and wellness, along with flavors, he added.

In ADM’s Nutrition segment, operating profit declined 36% to $109 million from $169 million. Within the segment, Human Nutrition operating profit fell 44% to $103 million from $185 million. Impacts related to unplanned downtime at Decatur East, a normalizing texturants market and higher manufacturing costs negatively impacted margins. An explosion at a Decatur, Illinois, plant injured eight employees on Sept. 10, 2023.

Within the Nutrition segment, Animal Nutrition operating profit was $6 million, which compared with a loss of $16 million in the previous year’s second quarter. Cost-optimization efforts and lower input costs supported higher margins.