US grain handling company The Andersons has announced a $14-million loss in the first quarter of the year compared with a $1.7 million loss a year earlier, as pre-tax income in the company\u2019s Trade and Plant Nutrient groups weighed on earnings.<\/p>\r\n\r\n
The company, which is divided into a Trade, Ethanol, Plant Nutrient and a Rail Group, said the report included an $8.7-million adjustment related to its purchase of the Lansing Trade Group, which tripled the size of the company\u2019s grain business.<\/p>\r\n\r\n
The company\u2019s Trade Group, which comprises more than 50 grain terminals in 11 states across the US, posted a $5.9 million loss compared to a $1.2-million loss a year earlier, with the company saying weak domestic markets, foreign trade uncertainty and the floods in Nebraska took its toll on earnings.<\/p>\r\n\r\n
\u201cIncome derived from grain originations and the group’s assets was down slightly on limited farmer selling and diminished income from storing wheat; those results also included a $2.2 million insured loss due to property damage caused by heavy rains in Nebraska,\u201d the company said.<\/p>\r\n\r\n
The company\u2019s Plant Nutrients Group, which includes fertilizer production, posted a $3.9 million loss versus a profit of $1.1 million a year earlier largely due to cold and wet weather hitting demand.<\/p>\r\n\r\n
\u201cFarmers may not have time or the inclination use as much fertiliser as anticipated in the face of low grain prices,\u201d executives at the company said on a conference call on Tuesday.<\/p>\r\n\r\n
In terms of the company\u2019s ethanol business, it posted a $2.6 million profit compared with $3.1 million a year earlier, despite what the company said was a \u201cweak margin environment\u201d as the US suffered from an oversupply of corn that is being funnelled into ethanol production.<\/p>\r\n\r\n
The company added that it had already hedged 40% of its Q2 ethanol production at “acceptable margins”.<\/p>\r\n\r\n
However, Brian Valentine, the company\u2019s vice president and CFO, told investors that any resolution to a trade deal with China would give a boost to ethanol and exports of DDGS.<\/p>\r\n\r\n
\u201cShort-term, we think it could be very positive for ethanol if ethanol is imported alongside DDGs,\u201d he said.<\/p>\r\n\r\n
“A trade deal with China would be a shot in the shoulder we’ve all been waiting for, especially ethanol,” he added.<\/p>\r\n\r\n
The Andersons closed its purchase of the Lansing Trade Group earlier this year, buying out the 67.5% share of the company it did not previously own from Macquarie Bank and Chinese meat processing company New Hope.<\/p>\r\n
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