The increase could bring potential relief in terms of lower commodity prices.
The company forecasts a decline in global soybean oiling margins, with these moving in the range of $35/metric ton (MT) to $60/MT from around $70/MT last year. But it expects growth in demand for vegetable oils, driven by renewable diesel, along with stronger growth in demand for soybean meal (SBM), contributing to structural margin improvement.
Factors such as improving economies in many Southeast Asian markets and high beef prices favoring pork and chicken consumption will support growing demand for SBM, ADM CEO Juan Luciano said on a conference call with market analysts today.
In addition, the agribusiness group expects mid-single-digit revenue growth and higher operating income for its nutrition division in 2024 compared to the prior year.
Indeed, Luciano, on the earnings call, said this year will be marked by a strong recovery in ADM’s animal nutrition business as well as the flavors unit, with additional growth expected in pet solutions, but – a challenging performance is expected in the special ingredients. It also noted a growing stream of innovation in both the animal nutrition and human nutrition divisions.
Financial results
The positive outlook was outlined in a report on financial results for Q4 and the full year ending December 31, 2023, published today.
In the fourth quarter of 2023, operating profit for ADM’s food business faced challenges, coming in at negative $10 million, marking a 110% year-over-year decline. The unscheduled stay at the Decatur complex also had a negative impact.
