Cargill, ADM to Swap Midwest Grain Elevators
Cargill and Archer Daniels Midland (ADM) have announced an agreement to swap select grain elevators in the U.S. Midwest, in a deal that is scheduled to close by the end of summer.
Under the terms of the agreement, Cargill will sell its elevators in Mount Vernon and Evansville, Indiana, to ADM, and in return, ADM will sell its elevators along the Illinois River in Beardstown, Naples, and Keithsburg, Illinois, to Cargill.
Both companies have been looking to streamline operations and cut costs in recent years due to a global grain glut. Additionally, the ongoing trade war between the U.S. and China have further squeezed margins, reduced U.S. exports, and led to Cargill reporting a 41 percent drop in its fiscal fourth quarter profit. As the companies navigate these challenging conditions, both have concluded that the swap will increase efficiencies and fit the long-term strategies of both parties as they strive to maximize returns.