Global Grain Trader ADM Cuts Costs Amid Trade Uncertainty
Archer-Daniels-Midland (ADM), a leading global grains trader, is implementing cost-cutting measures and staff reductions to navigate a challenging industry downturn. The downturn is exacerbated by uncertainties surrounding U.S. biofuels policies and an escalating trade war.
Following an accounting scandal in 2023, ADM has experienced its weakest fourth-quarter profit in six years. The company projects a potential third consecutive annual earnings decline in 2025.
In response, ADM is eliminating up to 700 positions and targeting cost reductions of $750 million over the next three to five years, aligning with similar measures implemented by agribusiness rival Cargill.
CEO Juan Luciano highlighted the difficulty in predicting the impact of President Trump's increased tariffs on Canada, Mexico, and China, which have prompted retaliatory measures from major U.S. agricultural buyers. China has imposed tariffs on U.S. goods, excluding crops, while Trump has temporarily suspended tariffs on Canadian and Mexican imports.
Luciano noted that while tariffs may benefit U.S. grain traders like ADM, retaliatory measures could pose challenges. ADM is well-positioned to capitalize on trade disruptions by sourcing crops from alternative markets like Brazil when U.S. imports are restricted.
ADM is also awaiting clarity from the Trump administration on tax credits for U.S. biofuels producers, which could support oilseed crushing and biodiesel margins. Luciano emphasized the company's role as a major ethanol producer and supplier to biofuel manufacturers.