ADM Archer Daniels Midland Company

Agricultural firms shuffle executives as trade disputes, low prices upend business

By Jacob Bunge 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 20, 2019).

Archer Daniels Midland Co.'s top grain-trading executive is departing as the agricultural giant restructures its operations and confronts a challenging farm economy.

Wes Uhlmeyer, president of ADM's grain business, chose to leave the Chicago-based company for personal reasons, people close to the matter said, not because of a disagreement over strategy. An ADM spokeswoman said Chris Boerm, president of ADM's transportation division, also will take on the grain role, which he has held previously.

The change atop ADM's grain unit follows similar leadership shuffles at rival agricultural firms, including Cargill Inc., Bunge Ltd., Louis Dreyfus Co. and Gavilon Group. Those shifts come as the world's largest crop merchants grapple with trade disputes that have upended the global flow of commodities. Years of low crop prices due to record output have also made it tougher to turn a profit trading farm goods.

ADM, which also processes crops into fuel and flavorings, is revamping operations after an acquisition spree in recent years that bulked up its ingredients business. Chief Executive Juan Luciano has invested to build up ADM's business in flavorings and plant-based proteins, which tend to be more profitable than the company's core commodity-trading operations.

Minnesota-based Cargill this month appointed longtime executive Joe Stone to run its global agricultural supply chain, taking over from G.J. van den Akker, who will retire in 2020. Also this month, Louis Dreyfus said Anthony Tancredi would take over the Dutch company's grain business, replacing Adrian Isman, who took over as chairman of an affiliated sugar business.

Meanwhile, Gavilon, a major U.S. grain company based in Omaha, Neb., on April 1 named Steven Zehr its new CEO following the retirement of Lewis Batchelder. Bunge in January named Gregory Heckman, a former Gavilon CEO, as its acting chief executive.

Bouts of dry weather in South America and trade disputes between the U.S. and major buyers like China and Mexico last year injected volatility into agricultural markets. Livelier markets were a welcome change for commodity traders after a string of big harvests held prices low for years. But global crop traders like ADM, Cargill and Bunge have struggled in recent months as trade disputes have cut into U.S. crop exports and further weighed on commodity prices.

ADM in February said its quarterly profit declined by 60%, partly because of lower earnings in its grain-trading unit, which recorded an "extremely small volume of U.S. soybean exports to China." Bunge that month reported a $65 million quarterly loss. Cargill in March said the near-absence of Chinese buyers for 2018's bumper U.S. soybean crop cut into profits for its trading and processing business.

Flooding and persistent winter storms across the U.S. Farm Belt have posed a new challenge to agricultural companies in recent weeks. Rain and snowstorms disrupted ADM's train, truck and barge operations and forced a Nebraska corn plant to temporarily shut down, disruptions that ADM estimated would reduce its quarterly profit by $50 million to $60 million.

ADM last week told employees it would seek voluntary early retirements in the U.S. and Canada, and could lay off staff as part of restructuring efforts. A spokeswoman said the reduction would affect a very small percentage of ADM's 31,600 global employees, and was being made in response to recent acquisitions.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

April 20, 2019 02:47 ET (06:47 GMT)

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