Ethanol and Biodiesel Help Drive ADM Profits

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ADM Agribusiness giant and biofuels leader Archer Daniels Midland today reported an impressive 17 percent increase in profits for the quarter ending December 31, 2005 – mainly due to lower corn prices and higher ethanol prices. The entire corn processing sector of ADM’s business increased $104 million over the same period in 2004 to well over $236 million in 2005 – up close to 80 percent. The bioproducts portion, which includes ethanol, was up 40 percent to $122 million. Officials said that while the low corn prices from last year’s record crop were the major reason for the higher profits, they are very optimistic about continued strong demand for ethanol as cities convert from MTBE and auto makers promote increased use of E85. ADM officials are also very optimistic about biodiesel, especially in Europe where ADM is a leader in production. “More than 50 percent of the automobiles there are diesel engines, so it’s really a different model from the United States,” said Chairman Allen Andreas. However, he says biodiesel holds great promise for the U.S. as well as the sulfur is removed from the fuel requiring more lubricity. Here is a link to the report presentations and audio from this morning’s press conference on the ADM site. I am in the process of cutting up some of that audio to put up some short sound bites later that refer specifically to the ethanol and biodiesel aspects of ADM’s business.

3 thoughts on “Ethanol and Biodiesel Help Drive ADM Profits”

  1. Cindy,

    With such a spike in ADM profits, perhaps they can see their way to no longer needing the $0.54 a gallon tariff on sugar cane-based ethanol from Brazil?

    Of all people, ADM should believe in the free market instead of tariffs and mandates that artificially prop up prices.

    Best,

    Gary Dikkers

  3. You don’t think tariffs just pop up out of the ground by themselves, do you?

    Tariffs, mandates, tax credits, and subsidies come about because some lobby has the clout to convince politicians to pass legislation establishing them.

    There is a tariff on sugar cane-based ethanol from Brazil because someone thought their low-priced imported alcohol could hurt their business and was able to persuade the U.S. Congress to establish that tariff.

    If not ADM, who do you think?