Decatur, Illinois-based Archer Daniels Midland Company (NYSE:ADM)—popularly known as ADM—has burnished its reputation as an American farming stalwart through its TV and radio ads (and PBS sponsorships) billing itself as the "Supermarket to the World."
With its blue-collar roots and long-standing role as a worldwide agricultural middleman, processing and distributing food to an ever more populous and prosperous world, ADM is capitalizing on the growing numbers of middle-class consumers in emerging economies like China and India who are hungry for higher quality food.
The agribusiness giant is primarily engaged in procurement, transportation, storage, processing, and sale of agricultural commodities and products, including corn, wheat, cocoa, oilseeds, and other feedstuffs. But ADM also provides agricultural services and, in recent years, has become a major force in the ethanol industry.
Earlier in the recession, ADM raked in the profits, boosting its earnings and topping Wall Street's estimates as the company reaped the benefits of lower commodity prices and higher selling prices. In the most recent quarter, the company's profit fell 2% to $567 million, or 88 cents a share, from $578 million, or 90 cents a share, in the year-ago period, on lower selling prices and higher commodity prices. But it benefited from energy inflation, using more corn for its large and growing ethanol refining operations. ADM hopes to position itself as "the global leader in bioenergy" while expanding its food processing business.
Already a leading producer of corn-based ethanol and soybean-based biodiesel, the company is a fierce advocate and political lobbyist for subsidies to expand the renewable fuels industry in the United States. Despite being beat out by Valero Energy (NYSE:VLO) in a bid to acquire seven ethanol facilities (at a significant discount) last year, ADM remains the world's largest corn-into-ethanol processor and a serious player in the alternative fuels race. It doesn't hurt that ADM is actively collaborating with oil giant ConocoPhillips to develop next-generation biofuels from non-food crops, wood, and switchgrass.
Everything considered, ADM has global reach, an extensive logistics and distribution network, diverse crops and product lines, and the overall financial strength to maintain their position in the marketplace even as the global financial crisis drags on.
Image courtesy of ADM
Shannon Roxborough is a career freelance writer, editor and international consultant who has authored hundreds of articles for a variety of media. He's covered business, companies and investments spanning all sectors, including green energy and cleantech.
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