USA- Seaboard Corp. registered an operating income of US$43 million in its Commodity Trading and Milling (CT&M) segment during the first quarter that ended April 1, up 258% from the US$12 million posted in the same quarter a year ago.

Seaboard’s CT&M segment has milling operations in 40 locations in 23 countries producing approximately two million tonnes of wheat flour, maize meal, manufactured feed, and oilseed crush commodities annually.

The segment, which sources and markets over 14 million tonnes of agricultural commodities yearly, recorded a 148% increase in operating income for the fiscal year 2022, and this Q1 performance shows a significant improvement. 

According to Seaboard, the increase in operating income primarily reflected the change of US$25 million in mark-to-market adjustments on derivative contracts.

Without the mark-to-market accounting to its derivative instruments, operating income in the segment would have been US$36 million, up from US$30 million in the same period a year ago.

According to the released results, the net sales for the segment during the quarter totaled US$1.34 billion, down 14% from $1.57 billion in the same period a year ago. 

This decrease primarily reflected lower volumes of certain commodities sold, due to increased competition that reduced net sales by US$321 million. 

During the release of the 2022 results, Seaboard’s management could not predict the direction sales will take in 2023 despite the impressive performance of the CT&M segment in 2022. 

“Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which this segment operates, and the volatility in the commodity markets, management is unable to predict sales and operating results for this segment for future periods,” Seaboard commented in a February filing with the US SEC.

These Q1 results are evidence of that outlook.

Meanwhile, in a May 3 filing with the US Securities and Exchange Commission, Seaboard said it invested US$111 million in property, plant, and equipment in the first quarter of fiscal 2023. 

US$81 million of this investment was in the Pork segment, and US$28 million was in the Marine segment. 

Additionally, for the quarter ending on April 1, Seaboard reported US$25 million in income from its investment in Butterball, one of the largest producers of turkey products, up from US$16 million in the same three-month period of 2022.

Overall, Seaboard sustained a loss of US$16 million in the first quarter, compared with an income of US$103 million, in the same period a year ago. 

Moreover, overall net sales were US$2.5 billion, down 7.8% from US$2.71 billion in the same period a year ago.

In other news, Seaboard Foods earned a Worker Safety Award of Merit for improving safety performance at its Guymon, Okla., pork processing from the North American Meat Institute (NAMI) at the 2023 Environmental, Labor, and Safety+ Conference in Carlsbad, Calif.  

“Providing employees with a safe working environment continues to be our highest priority and something that is top of mind for all our employees,” said Seaboard Foods Vice President of Human Resources Grae Griffin. “We are grateful to be recognized for our commitment to making our workplace safe for our employees.”

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